A revocable living trust can be the ideal estate planning tool for a wide variety of people. While there are trusts that are used by very wealthy people who have advanced estate planning goals, you do not have to be a millionaire to utilize a living trust.
Control is something that people are concerned about when they think about trusts. When it comes to revocable living trusts, you retain full control, because you can revoke the trust at any time and take back direct personal possession of the property.
The anatomy of a trust involves a grantor, who is the person who establishes the trust. There is a trust administrator called the trustee, and there is a beneficiary (or beneficiaries) who can receive monetary distributions from the trust.
If you establish a revocable living trust, you can act as the trustee while you are alive and competent. As a result, you control the actions of the trust, and you can also act as the initial beneficiary.
When you are creating a living trust, you name a successor trustee to handle the trust administration tasks after you pass away. You could also empower the trustee to administer the trust if you become incapacitated late in your life.
Technically speaking, any adult who is willing to assume the role can act as a living trust successor trustee. You can name someone that you know to act as the successor trustee, but it would also be possible to use a corporate trustee like a trust company or the trust department of a bank.
In many cases, a corporate trustee could be a better choice because there would be no longevity concerns or conflicts of interest. Plus, you could be certain that the trust would be administered in accordance with professional standards, and inherent oversight would be present.
Living Trust Benefits
In closing, we should highlight a couple of the benefits that you would gain if you utilize a living trust as the centerpiece of your estate plan. If you were to use a last will to transfer personally held property, it would be admitted to probate. The heirs would not receive their inheritances until after the estate was closed by the court, and this will typically take close to a year at minimum.
The expense factor can also enter the picture. There can be some considerable costs that accumulate during the probate process. Assets in a living trust can be distributed outside of probate, so these drawbacks are avoided.
Another advantage that you would gain if you establish a living trust is the ability to include spendthrift protections. You can instruct the successor trustee to distribute assets in a measured fashion over an extended period of time.
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