A revocable living trust can be the ideal estate planning tool for a wide range of people, and you do not have to be a multimillionaire to establish this type of trust. In fact, a revocable living trust would not be a good choice for very wealthy people who have estate tax and asset protection concerns.
Let’s look at some of the reasons why you may want to consider the utilization of a living trust.
If you were to use a last will to facilitate the distribution of your personally held property, lump-sums would be distributed to your heirs. People who are not very good money managers could mismanage or squander their inheritances.
Things are different with a revocable living trust. When you establish a living trust, you can act as the trustee while you are living, and you can also act as the first beneficiary. In the trust declaration, you name a successor trustee to assume the role after you are gone, and you name your heirs as successor beneficiaries.
You can instruct the trustee regarding the way that you want the assets to be distributed. For example, you can allow for a certain amount to be distributed each month, or you could instruct the trustee to distribute only the earnings of the trust.
Timely Asset Transfers
A last will is not administered in a vacuum. When a will is utilized, it is admitted to probate, and the probate court supervises the administration of the estate. Certain interested parties are protected, but there are some drawbacks that are not necessarily going to benefit the rightful heirs to the estate.
One of them is the consumption of time. The probate process will typically take eight months to a year if there are no complications, and the heirs cannot receive anything during the probate process. There are also expenses that can accumulate during probate.
If you were to use a living trust instead of a last will, the successor trustee would be able to distribute assets in a more timely manner outside of the probate process.
Many elders become unable to handle their own financial affairs at some point in time. There are various different causes of incapacity as we all know, but Alzheimer’s disease is a leading threat. This disease strikes approximately 45 percent of people who have reached the age of 85 according to the Alzheimer’s Association.
When you have a revocable living trust, you can empower a disability trustee to administer the trust in the event of your incapacitation, so you can be sure that a decision-maker of your own choosing will be at the ready to act on your behalf if it ever becomes necessary.
Attend a Free Living Trust Workshop
If you would like to learn more about living trusts, attend one of our upcoming free workshops. There will be a number of different sessions held during the month of January, and you can click the following link to see the schedule: Naples FL Estate Planning Workshops.