Revocable Living Trusts are extremely useful estate planning tools for a variety of reasons.
Initially, when you transfer title of your property to your trust, you will name yourself the trustee. Therefore, not too much changes in regard to your day-to-day control of the property.
With a Revocable Living Trust you can revoke the trust while you are alive and mentally capable. This allows you to change ownership of the trust property back to yourself. This often helps reassure people with apprehension about forming a trust owning their property.
The first benefit arrives if you become mentally incapacitated and unable to act as trustee. The Revocable Living Trust lists successor trustees so that the trust can be administered in this case, or upon your death. Think of it like the duties listed in a property power-of-attorney. The successor trustee will be responsible for handling financial issues of the trust because you are unable to. This successor trustee would be someone that you trust -- often a spouse if they are still alive. There is frequently a second successor trustee in case the first successor trustee is unavailable.
If you die without a Revocable Living Trust, the estate would usually go through probate. This requires a probate attorney and the fees of probate can be many thousands of dollars. It may take many months to finish probate, and the details are available in the public record. Even your nosy neighbor can find out how much you owned and how much the beneficiaries got.
But if you had created a Revocable Living Trust, you would have avoided probate, which is the primary benefit. You would have named successor trustees in case of mental incapacity, and upon death the successor is responsible for distributing the trust assets to the beneficiaries as specified in the trust.
For the above reasons a Revocable Living Trust is attractive to someone faced with probate. Forming a Revocable Living Trust is a smart decision, even if it costs money in the short term. In the long run it saves time, money, and privacy. Contact an attorney in you state to review your state's laws and how they affect your particular situation.
Initially, when you transfer title of your property to your trust, you will name yourself the trustee. Therefore, not too much changes in regard to your day-to-day control of the property.
With a Revocable Living Trust you can revoke the trust while you are alive and mentally capable. This allows you to change ownership of the trust property back to yourself. This often helps reassure people with apprehension about forming a trust owning their property.
The first benefit arrives if you become mentally incapacitated and unable to act as trustee. The Revocable Living Trust lists successor trustees so that the trust can be administered in this case, or upon your death. Think of it like the duties listed in a property power-of-attorney. The successor trustee will be responsible for handling financial issues of the trust because you are unable to. This successor trustee would be someone that you trust -- often a spouse if they are still alive. There is frequently a second successor trustee in case the first successor trustee is unavailable.
If you die without a Revocable Living Trust, the estate would usually go through probate. This requires a probate attorney and the fees of probate can be many thousands of dollars. It may take many months to finish probate, and the details are available in the public record. Even your nosy neighbor can find out how much you owned and how much the beneficiaries got.
But if you had created a Revocable Living Trust, you would have avoided probate, which is the primary benefit. You would have named successor trustees in case of mental incapacity, and upon death the successor is responsible for distributing the trust assets to the beneficiaries as specified in the trust.
For the above reasons a Revocable Living Trust is attractive to someone faced with probate. Forming a Revocable Living Trust is a smart decision, even if it costs money in the short term. In the long run it saves time, money, and privacy. Contact an attorney in you state to review your state's laws and how they affect your particular situation.
About the Author:
Nick Wroblewski is a Chicago estate planning attorney and owner of law firm Windy City Esquire, Ltd. If you reside in Illinois and have estate planning questions, contact Nick. Information is also available on the Windy City Esquire blog. If you live in another state (not Illinois), contact an attorney near you for estate planning assistance.
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