The revocable living trust is one of the key tools in the estate planning process. Here are some questions people often ask us about revocable living trusts:
Can someone who is not a millionaire benefit from a revocable living trust?
Yes. There is no minimum net worth necessary to make a living trust a good choice. Regardless of how much wealth you own, a revocable living trust lets you pass assets to your heirs without having to deal with the costly and time-consuming process of probate. It allows you to plan your inheritance to take into account the unique circumstances of each beneficairy, especially those for whom giving “control of the checkbook” would be imprudent and contrary to your goals.
While millionaires who are married may be attracted to revocable living trusts because they can save estate taxes, most clients choose living trusts for their non-tax benefitis. Other factors beside taxes and estate value determine what is a good fit.
If I become incapacitated, what happens to the assets that I placed into the trust?
This is an important question to consider. Incapacitation becomes more likely as we age. If you must depend on others for your care, you’ll naturally want to be sure that somebody you trust will administer your assets. When you create the trust agreement, you will choose what is called a successor or disability trustee. This individual or entity would have the power administer the assets that have been conveyed in the trust in the event of your incapacity. That makes a living probate proceeding known as a Guardianship unnecessarty. Setting up a trust also makes it easier for the person of your choice to act on your behalf.
Do I have to surrender all control of assets I place in a revocable living trust?
No, you do not. You as the grantor of the trust can act as both the trustee (manager of the trust) and the beneficiary (the person[s] who get to use and enjoy the assets held in the trust) while you are alive and of sound mind.
It’s business as usual when you make the trust. Nothing changes in the way you manage your affairs. You file and pay your income taxes just like before you made your trust. Your trust stands-by silently until needed, which is at your death or incapacity.
An experienced estate planning attorney can help you decide whether a revocable living trust is right for you. An attorney can also inform you about what criteria you should consider when evaluating potential successor or disability trustees. Request a free report about living trusts by visiting www.zimmerlawfirm.com.