A revocable living trust is an estate planning instrument that lets you designate who inherits your money and property when you die. The word “revocable” means that you can change it as often as you want. The term “living” indicates that this is something you set up while you are still alive.
Comparing Revocable Living Trust and Traditional Wills
Revocable living trusts and traditional wills have some things in common and some differences. Wills and revocable living trusts both allow you to name the beneficiary to whom you wish to leave your property. Both documents let you leave property to your children, even if they are minors. You can make changes to both documents as often as you’d like.
Trusts, unlike wills, can avoid probate and conservatorship and lessen the chances of your estate getting caught up in a court battle. Trusts are also private after your death, whereas wills are not.
Wills, unlike trusts, can name a guardian for minor children and designate someone to care for property they inherit. Wills can also leave instructions on how to handle debts or tax obligations.
Avoiding Probate Court
Revocable living trusts are a popular option because they avoid probate court. Probate is the process by which a court supervises the way a person’s estate is dispersed. Costs and procedures vary by jurisdiction, but it is expensive and time-consuming almost everywhere. Money and property passed through a living trust are not subject to the probate court process.
Creating the Trust Document
A revocable living trust is a written document. Two parties, the trust maker and a notary public, must sign the trust document. It must include a list of the property, the details of who will receive the property when the trust maker dies, and the name of a designated trustee.
The decision about who will be the trustee is a critical one since this is the person who carries out the trust maker’s wishes after the death of the trust maker. While the trust maker is alive, he or she serves as his or her own trustee. The trustee named in the trust document takes over when the trust maker dies.
Moving Titled Property Into the Trust
When the trust document is created, the trust maker lists the property he or she wants included in the trust. However, an additional step is required to move any titled property, such as real estate, into the trust. It must be retitled into the trust, a reasonably straightforward process, but one that must be done right. If complications arise, the real estate could end up in probate.
Determining what happens with your property after your death is too important to take any chances. Contact an experienced and knowledgeable lawyer about a living trust. who is familiar with the rules in your jurisdiction to make sure your wishes are carried out.
