It is important to understand the facts when you are planning your estate. There are websites on the Internet that sell do-it-yourself estate planning notions. They contend that estate planning is so simple, you can easily do it for yourself.
In fact, there are many things to take into consideration before you make any decisions. With this in mind, let’s look at a common misconception about revocable living trusts.
The Matter of Control
You may be under the impression that you lose control of assets that you place into any type of trust. For this reason, you may assume that you should use a last will to facilitate the transfer of your monetary resources.
This is a misconception. There are some trusts that are irrevocable, and generally speaking, you do lose direct control of assets that you convey into this type of trust. However, there is another type of trust called a revocable living trust.
If you were to create a revocable living trust, you would not surrender control of the assets that you placed into the trust.
When you create a revocable living trust you are called the grantor. The trustee administers the trust, and the beneficiary can receive monetary distributions from the trust.
While you are alive and well you have the power to serve as the trustee and the beneficiary. As a result, you control all of the actions of the trust quite directly. In addition to this, if you want to, you can revoke the trust entirely and it would no longer exist.
You probably will not want to revoke the trust because the ultimate objective is to facilitate future asset transfers. To make this happen, you name a successor trustee and successor beneficiaries.
After you die, the successor trustee would distribute assets to the successor beneficiaries in accordance with your wishes. You leave instructions that the trustee must follow when you create the trust agreement.
It should be noted that the successor trustee could also be empowered to administer the trust in the event of your incapacitation.
With a revocable living trust you retain efficient control of the assets while you are living, and you can account for the possibility of incapacity late in your life. In addition to these two advantages, revocable living trusts also facilitate probate avoidance.
If you were to use a last will rather than a revocable living trust, the will would be admitted to probate. The heirs to the estate would not receive their inheritances until after the process had run its course. Probate can be time-consuming, and there are also expenses that can accumulate while probate is underway.
Free Report on Revocable Living Trusts
Our firm has prepared a free special report on revocable living trusts. If you would like to learn all the facts, download your copy of the report. You can obtain access through this link: Revocable Living Trust Report.
Parman & Easterday
Latest posts by Larry Parman, Attorney at Law (see all)
- Clarity is Key to Planning & How Tom Petty Could’ve Done It Better - July 18, 2019
- Why Crowdfunding May Cost You Medicaid Eligibility - July 16, 2019
- Beneficiary Designations, etc., Aren’t a True Substitute for a Trust - July 11, 2019