Key Characteristics and Benefits of a Revocable Living Trust
Control and Flexibility
As the grantor, you maintain complete control over the assets placed in the trust. You can make changes, add or remove assets, and even revoke the trust entirely if you wish to do so.
Unlike a will, which becomes a public record upon probate, a Living Trust allows for a private transfer of assets, keeping the details of your estate and beneficiaries confidential.
Avoidance of Probate
One of the primary advantages of a Living Trust is that it bypasses the probate process. Upon the grantor’s passing, the trust assets are distributed according to the terms of the trust, avoiding the time-consuming and costly probate court proceedings.
A Living Trust provides for the management of your assets in case of incapacity. If you become unable to manage your affairs due to illness or injury, the successor trustee you have designated will step in to manage the trust assets on your behalf.
Continuity of Management
The Living Trust ensures a smooth transition of asset management. If the grantor becomes incapacitated or passes away, the successor trustee seamlessly takes over the management and distribution of assets without the need for court intervention.
Funding the Trust
For the trust to be effective, assets must be properly transferred into the trust’s name. This process, known as “funding the trust,” involves re-titling assets, such as real estate, bank accounts, and investments, in the name of the trust.
No Estate Tax Savings
A Revocable Living Trust does not offer any estate tax advantages on its own. However, married couples can use certain types of Living Trusts, such as “AB Trusts” or “Marital and Family Trusts,” to maximize estate tax exemptions and minimize estate tax liability.
While a Revocable Living Trust provides no significant protection from creditors during the grantor’s lifetime, certain provisions can be included to protect assets for the beneficiaries after the grantor’s passing.
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