A Revocable Living Trust is a Trust document that can be changed over time. Revocable Living Trusts are a good option for those hoping to help their family avoid issues with Probate after their passing.
There are many other benefits to Revocable Living Trusts as well. If you are interested in learning more about how Revocable Living Trusts work, having a knowledgeable and experienced attorney working for you may be in your best interests.
For an initial estate planning consultation, reach out to The Law Office of David S. Schleiffarth, LLC
What Is A Revocable Living Trust?
Revocable living trusts are trusts that determine how your property will be distributed and managed upon your death. These are different from irrevocable living trusts in that revocable living trusts can be amended or revoked while you are still living. Generally, there are three parties involved in the revocable living trust, including
- The grantor – The grantor is the person who creates the trust and has the opportunity to revoke or amend it as they see fit.
- The trustee – The trustee is responsible for handling the administration of the trust, including disbursements to beneficiaries should the grantor be incapable of doing so.
- The beneficiary – The beneficiary is the individual or entity that will receive the assets contained within the trust.
The Benefits Of Revocable Living Trusts
Revocable trusts are one of the best opportunities for grantors to retain control over their property and assets while they are still living.
Avoiding Probate
One of the top benefits of choosing a revocable living trust is the ability to avoid probate. If you have assets and property that are not contained within a revocable living trust, your estate may need to go through probate court.
This could be costly for your family and beneficiaries may not receive their assets or distributions until your estate has gone through the probate system. You also run the risk of having your assets being stuck in Probate, where you are beneficiaries will not be able to access them. You can avoid probate by using a Revocable Living Trust that passes your assets to beneficiaries upon your death.
Control Over Beneficiary Distributions
A Revocable Living Trust gives you the opportunity to control how your assets are distributed to beneficiaries when they receive their inheritance. For instance, you may want to set a specific age at which your children or grandchildren can access the assets contained within your trust. You also have the power to determine how the distributions can be used by implementing provisions or restrictions in your trust administration instructions.
Retain Government Benefits
Setting up a Revocable Living Trust also gives you the opportunity to continue collecting Medicaid benefits. If your spouse receives an inheritance upon your passing, and that spouse currently receives Supplemental Security Income (SSI) benefits, setting up a Revocable Living Trust can give you the opportunity to incorporate special-needs provisions and disabled individual allocations so they can continue receiving their SSI or Medicaid benefits as needed, without having to disclaim the inheritance.
Business Succession Provisions
Your customized Revocable Living Trust can also plan for the succession of your business upon your passing. This includes appointing trustees who will handle business operations and leadership responsibilities. This way, your business operations can continue without being interrupted as new management steps in to take over upon your incapacitation or death.
Protecting Your Assets
Another benefit of Revocable Living Trusts is the ability to protect your assets. Since living trusts can protect the future distributions of beneficiaries, the assets contained within the trust will be shielded from the beneficiary’s creditors or even ex-spouses seeking alimony or child support.
Additional Benefits of Revocable Living Trusts
However, these are not the only benefits of having a Revocable Living Trust in place. Some of the other advantages of Revocable Living Trust include:
- The contents of the trust remain private
- Trust administration remains private
- Your Trust does not have to go to court
- Property is distributed to beneficiaries in a timely manner
- Trustees do not need probate court approval to sell assets
Our Law Firm Can Help
Having a Revocable Living Trust lawyer in Missouri working for you could help give you the peace of mind you deserve as you work through your Estate Plan. When you are not sure whether a Revocable Living Trust is a good fit for you and your family, your lawyer can go over all of the details of how Revocable Living Trusts work and your financial goals to determine which types of trusts are in your best interest.
You can also get help from your Revocable Living Trust lawyer with assigning trustees, determining how your assets should be distributed to your beneficiaries, working to reduce your tax implications, and protecting your family from having to put your estate through probate court.
Considerations Of Revocable Living Trusts
Although there are many benefits of Revocable Living Trusts, they are not for everyone. Some of the different things to consider before moving forward with a Revocable Living Trust include:
- What does it mean for your trustee to become incapacitated? Who steps in?
- When will your immediate successor trustee’s responsibilities start and stop?
- Will your Revocable Living Trust pay your estate debts?
- What qualifications does your Revocable Living Trust trustee have?
- Do you want to assign a trust protector?
- Do you find it necessary to place restrictions on the beneficiaries?
- Do you want to allow for partial distributions at various ages for your beneficiaries?
- Are there specific powers you would like your trustee to have?
Unfortunately, one of the major drawbacks of Revocable Living Trusts is that your assets will not be protected from creditors. This means your assets could be seized despite being placed in a Revocable Living Trust. You may be eligible for charitable giving tax deductions and reduce your capital gains taxes by choosing an Irrevocable Living Trust as opposed to a Revocable Living Trust.
Who Needs A Revocable Living Trust?
You might need a Revocable Living Trust anytime you want your assets to be transferred to your loved ones or other beneficiaries without having to go through court. You might also consider choosing a Revocable Living Trust if you have minor children and are hoping to limit your children’s access to their inheritance until they reach a certain age.
If you make a Living Trust, you do still need a Will in place, as your Will should determine other matters, including your funeral arrangements, guardianship decisions, and other critical details.
How Do Revocable Living Trusts Work?
One of the top benefits of choosing a Revocable Living Trust is the ability to make changes and amendments after it has been set up. To set up your Revocable Living Trust, there are certain steps you need to take, including:
- Selecting the type of Revocable Living Trust, a joint or single Revocable Living Trust
- Selecting your immediate successor trustee
- Assigning Revocable Living Trust beneficiaries
- Working with your Trust attorney to draft your Trust documents
- Execute your trust with a notary and witnesses
How Much Does A Revocable Living Trust Cost?
The amount you can expect to spend when forming your Revocable Living Trust can vary widely depending on your specific financial goals and status.
Are Revocable Living Trusts Public Like Wills?
One of the benefits of Revocable Living Trusts is that they remain private. Your Revocable Living Trust will not need to be filed with the court, so the contents and beneficiaries of the trust will stay out of the public record. This can not only help protect your beneficiaries but help to reduce the likelihood of unhappy heirs.
How to Select Your Revocable Living Trust’s Trustee
You may be wondering who can act as trustee to your Revocable Living Trust. It is important to select an immediate successor Trustee who you can rely on to follow the instructions you have laid out in administration plans.
Some of the top characteristics of a Trustee you can trust include:
- Experience handling financial matters
- Experience in investing
- Honesty and trustworthiness
- Distributing trust assets to beneficiaries as intended
- Answering beneficiary questions as they arise
- Having recordkeeping and organizational skills
- Being prepared to handle the tax decisions and implications of the trust
- Remaining impartial with beneficiaries
- Resolving points of contention with beneficiaries
- Issuing tax reports and statements to trust beneficiaries
Ultimately, you have the option of choosing close friends, family members, or anyone else you trust to handle the execution of your Trust instructions.
Remember, Trustees have a fiduciary duty to act in the best interest of the grantor and your beneficiaries. If you do not believe your intended Trustee has this capacity, be sure to assign a new one or discuss your concerns with your Trust attorney so your Revocable Living Trust can be amended as needed.
Meet With A Revocable Living Trust Attorney in St. Louis, Missouri Today
If you have additional questions about how Revocable Living Trusts work or are still unsure whether a Revocable Living Trust is a good fit for your estate plans, be sure to discuss your concerns with your dedicated attorney.
Reach out to an experienced Missouri Revocable Living Trust lawyer at The Law Offices of David S. Schleiffarth, LLC to get the answers you need to make an informed and educated decision. Fill out our quick contact form or call our office to schedule your initial consultation as soon as today.
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