Revocable living trusts are becoming a more and more popular choice for people who are interested in planning their estates effectively and efficiently. One of the primary benefits that you gain by utilizing one of these trusts rather than a last will is the ability to arrange for the transfer of assets to your heirs outside of the process of probate.
Probate is conducted by the probate court where the deceased resided. During this time, creditors can step forward and seek satisfaction, and if anyone wanted to contest the wishes of the deceased, he or she could do so while the estate was being probated.
The above can be time-consuming, even for simple estates that are not being contested. And of course there are expenses that go along with the probate process that can wind up eroding your assets as they’re being prepared to be passed along to your loved ones.
Those are a couple of the reasons why revocable living trusts may be preferable to many people. To break down the components, there is a grantor (sometimes referred to as settlor or trustor) who actually creates the trust and funds the trust with their assets. The grantor must name a beneficiary, and there must be a trustee to administer the trust. While the grantor is living they will serve as their own trustee so they can continue to manage their assets. Finally, they will want to have use of their assets just as they did before creating the trust so they will name themselves the beneficiary during their lifetime. Then they will name heirs to their estate and a successor trustee to oversee distributions to them. They often name a bank trust department or an independent trust company to serve as successor trustee.
Living trusts also have value from an incapacity planning perspective and guardianships can be avoided through a well-constructed trust agreement.
This is a very brief, surface explanation. To learn more, make an appointment to sit down and discuss the value of revocable living trusts with a good Oklahoma City estate planning lawyer.
Author, President and Founding Attorney
Parman & Easterday