Revocable trusts, also called living trusts, are created during your lifetime and provide many important benefits. But a revocable trust also has some limitations you need to be know. You need to understand exactly what a revocable living trust can, and cannot, do so you can decide if creating this kind of trust makes sense in your situation.
An Oklahoma City trust lawyer can explain your different options for trust creation and assist you in determining if you could benefit from a trust and, if so, which type of trust is best to accomplish your goals. Give us a call to talk with an experienced attorney and find out more about the trust creation process and the benefits of a revocable trust.
Four Reasons to Create Revocable Trusts
There are many reasons why creating a revocable living trust is a good choice. Four reasons you may want to create a revocable trust include the following:
- Avoid probate: Assets held in your revocable living trust typically pass outside of probate in a much more timely and less costly trust administration process.
- Prepare for incapacity: When a revocable living trust is created, the creator can name himself or herself as the primary trustee. Someone trusted is typically chosen as a successor trustee who can begin managing the trust assets immediately in case of your incapacity.
- Flexibility: A living trust provides flexibility during your lifetime; you determine how the trust is managed and can make any changes to it you want.
- Transfer assets faster: If your loved ones have to wait for the completion of probate before they inherit money or property, the delay will be months or even years. With trust administration, the trust administrator can transfer assets much more quickly. This is important if an heir is waiting for an inheritance to pay bills or if assets require careful management and you don’t want a period of uncertainty as the executor of an estate waits to be appointed, then manages the assets under court supervision, and then must wait for the probate to be completed to effect the transfer of ownership.
Parman & Easterday can assist you in determining if these or other factors might warrant you creating a revocable trust.
Limitations of Revocable Trusts
While revocable trusts offer clear advantages, simply creating a revocable living trust will not solve all your estate planning or asset protection issues. A revocable living trust, for example, might not help you reduce the amount of estate tax owed when you pass away.
Because you maintain a high level of control over the assets in a revocable living trust, the assets are vulnerable if a creditor obtains a judgment against you. Or if you have to go into a nursing home and want Medicaid to help pay for your care, your living trust will be a problem because the assets in the trust may and likely will be considered countable assets.
If you have too many countable assets, you cannot qualify for Medicaid to help pay for nursing home care. Since Medicaid is the primary health insurer that pays for nursing home care–outside of some limited situations in which Medicare or private insurers pay for some period of care–your finances will be in serious trouble if you must go into a nursing home care and your assets are in a revocable trust.
These are a few times in which a revocable trust will not help you. You should talk to an experienced attorney about strategies that might better suit your needs, including estate tax reduction or ensuring you can qualify for Medicaid coverage for nursing home care.
Getting Help from An Oklahoma City Trust Lawyer
Parman & Easterday knows trust laws inside and out. Our legal team can advise you whether trust creation is the best approach to achieving your goals to protect assets, provide for your family, and plan your legacy. We can also assist you in creating your trust so you have confidence that the trust is legally valid and will provide the protections for which you created the trust.
To find out more about how revocable living trusts work and to discover more benefits of trust creation, give us a call today at (405) 843-6100 or contact us online. You can also join us for a free seminar to learn the basics of revocable trusts and how they can be part of your plan for the future.
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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