There are many tools in the estate planning toolkit, so you have options. It is definitely wise to discuss them with a licensed estate planning attorney so that you can make fully informed choices. Unfortunately, many people do not understand this, and their families often pay a heavy price.
Revocable Living Trust Benefits
An option that we recommend to a very significant percentage of our clients is the revocable living trust. There are a number of significant benefits that are realized through the utilization of this type of trust, and people are usually very pleasantly surprised when they hear about them.
First, there is the matter of control. The general understanding is that someone would create a trust to surrender ownership in a legal sense for one reason or another. There certainly are numerous different trusts that are used for these purposes, but they are irrevocable trusts.
We are looking at revocable living trusts. As the name would indicate, you can revoke a living trust if and when you ever choose to do so and walk away with direct personal possession of the assets. Of course, you are creating the trust for a reason, so it is unlikely that you will ever want to dissolve it entirely.
The ability to rescind the trust is not the only level of control that you retain. A person that creates a revocable living trust is called the grantor. With this type of trust, the grantor will typically serve as the trustee, which is the administrator, and the beneficiary.
In the trust declaration, you name a successor administrator to assume the role after you are gone, and your heirs would be the successor beneficiaries.
What this all means in simple English is that for all intents and purposes, assets in the trust are still yours, even though they technically belong to the trust. This is because you make all the decisions about what happens with the resources in the trust because you are the trustee.
Moving on to the benefits, when you convey assets into a living trust with your legacy in mind, everything that you will be passing along is consolidated under this one umbrella. This simplifies the administration process for the successor trustee.
You may have someone that is on your inheritance list that is not good at handling money. It can be very disconcerting to leave a significant inheritance to a spendthrift. The individual can squander it too quickly and have nowhere to turn for financial assistance going forward.
It is possible to account for this in a living trust with a spendthrift provision. In this clause, you could include parameters that dictate how much the trustee will distribute to the beneficiary, along with the timetable. We should also point out the fact that the creditors of the beneficiary would not be able to attach the principal.
A significant percentage of elders become unable to make sound decisions eventually due to Alzheimer’s disease or some other underlying cause. To account for this, you can name a disability trustee to assume the administrative duties if it ever becomes necessary.
The last major benefit that we will mention here is probate avoidance. When a will is used, it must be admitted to probate, and this is a costly and time-consuming process. With a living trust, the trustee can distribute assets outside of probate.
Married Couples and Joint Living Trusts
If you are married, you and your spouse could create a joint living trust. Assets that you own together would be added to the trust, and personal property could be held by the trust as well.
There are different ways that this type of trust can be constructed be depending on the desires of the couple in question. One common scenario would be for the individuals to serve as co-trustees and co-beneficiaries. After the death of one spouse, the trust’s assets would remain intact, and the surviving spouse would become the sole decision-maker.
Schedule a Consultation Right Now!
We are here to help if you would like to create a joint living trust or discuss any other estate planning matter with an attorney. You can give us a call at 513-721-1513 to schedule a consultation, and if you would send us a message, we will get back to you promptly.