What can a Revocable Living Trust do for you?

What can a Revocable Living Trust do for you?

Do you have a plan for your assets when you pass away? Where will all of your prized possessions pass on to when you leave your loved ones behind? If you don't have a verified, legal plan in place, your estate will be distributed according to the laws of the state in which you live. Everyone should have a will at a bare minimum, but better yet could be a revocable living trust for the following reasons:

A revocable living trust....

1) Avoids probate. By conveying all of your assets into a RLT, you (the grantor) will maintain incidents of ownership during your lifetime (aka, full use), BUT avoid assets being frozen upon death and heirs paying excess costs to unfreeze the assets from probate. This is a huge reason to utilize a RLT as opposed to a will. (With a simple will, assets pass through probate).

2) A RLT can have more specific terms on how your assets are distributed after your passing than a will, such as a sprinkle and/or spray clause for distribution to heirs at different ages or events in their lives.

3) A RLT is always amendable as long as the grantor is alive, hence the term, "revocable." A RLT becomes irrevocable upon the passing of the grantor.

4) You name a trustee to carryout your terms of the trust, and this can be anyone of your choosing (generally speaking). It is important to name someone who knows your situation well, and whom you trust. In many cases the trustee is a spouse or a child.

5) When assets are placed in a RLT, the estate assets become private and out of public record. For anyone who uses a will, that is not the case. Anyone can look up the value of a deceased's estate if a simple will is utilized because the assets pass through probate court.

6) While a RLT is going to be more expensive than a simple will up front, it almost always saves money on the backend (and usually many times the cost to draft a will). Of course, you will be gone at this stage in time, so it may not be of much importance to you to save your estate fees and expenses by keeping the assets out of probate, but for many people, this is a real concern.

Remember to consult an estate lawyer for details and personal advice before any decisions are made. #livingtrust #probate #estateplanning

-Your friends at Red Oak Financial Group