Ongoing Control and Flexibility
One commonly held misconception about trusts is the idea that you lose control of assets that you convey into a trust, and you can never change the terms. This is not the case when it comes to the revocable living trust.
You would act as the trustee during your lifetime, and your ability to use the assets that you sign up to the trust would not change at all. The “revocable” designation is quite literal; if you ever want to dissolve the trust, it is within your power to do so.
When you establish the trust, you name a trustee to succeed you after your passing. This can be someone that you know personally, and you can alternately utilize a professional fiduciary like a trust company or the trust department of a bank. Your heirs would be the beneficiaries of the trust.
Once you name the successor trustee and the beneficiaries and you set the terms, they can be changed at any time. You can also convey additional property into the trust after it has originally been created and funded.
When you have a living trust, you can provide asset protection for the beneficiaries. You can include a spendthrift provision that protects the principal from the beneficiaries’ creditors. They would have no direct access to the assets, so they would not be able to spend freely.
You can dictate the terms of the distributions, so you can spread them out over time if this is your choice.
Though it is not a very pleasant subject to contemplate, a significant percentage of elders become unable to make sound decisions at some point. Alzheimer’s strikes 10 percent of all seniors, and over 30 percent of elders that are 85 years of age and older have contracted the disease.
This is not the only cause of cognitive impairment, and cognitive difficulties are just one form of incapacity. To account for this, you can name a disability trustee that would assume the role in the event of your incapacity.
The asset distributions are not subject to probate when you have a living trust, and this is another plus. Probate is a costly and time-consuming legal process that is open to the public.
Pour-Over Will and Guardian Designation
Now that we have provided a brief rundown of the benefits, we can get to the point of this post. It is very likely that you will have some property in your personal possession that you never conveyed into the trust.
To account for this, you should make a pour-over will part of your larger estate plan. When you have this type of will, these assets would pour over into the trust after your passing. The transfer would be subject to probate, but it would be a relatively simple process.
Another reason to have a will even if you have a trust is to account for the designation of a guardian. If you have a dependent child or adult that is under your care, you cannot name a guardian in a trust, so you would add a will to accomplish this objective.
Your estate plan should also include a living will. This is an advance directive for health care that is used to state your preferences with regard to the use of life-support, and you can also add your organ and tissue donation choices.
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Take Action Today!
Since you found your way to this site, you must be thinking about your legacy. If you are going through life without an estate plan, today is the day for action.
Each situation is different, and the right approach will depend upon the circumstances. Personalized attention is key, and that is exactly what you will receive when you choose our firm.
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