Revocable Trusts

You may have heard of a revocable living trust (RLT), which is a commonly used estate planning solution. But what exactly are they, who is affected by them, how can they be changed, and what do they accomplish?

Planning ahead has obvious benefits. Whether you’re planning a vacation or researching for a job interview, it’s always smart to outline your priorities and anticipate potential challenges that may arise. Planning your estate has similar benefits. With plans clearly established, your wealth and assets are protected should you pass away or become incapacitated. It’s important to be aware, however, that simply meeting with an attorney and signing a trust does not mean your estate planning process is complete.
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Many people believe that once they set up a Revocable Living Trust and transfer assets into the trust, those assets are protected from lawsuits. This is absolutely not true. 

While Trusts commonly provide asset protection for beneficiaries, few trusts protect assets owned by the person who created the trust.

No Immediate Asset Protection?  Why Should You Create a Revocable Living Trust?

Fully funded Revocable Living Trusts are excellent tools.  Here’s why: 

1. You can protect assets passing to your spouse and children, providing protection for loved ones that they can’t put in place for themselves.
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To the general public, a trust may seem like an advanced tool only for the wealthiest among us. But, the reality is that trusts are a foundational estate planning tool with a solid history for being highly effective in ensuring a person’s wishes are carried out. The process begins with the maker of a trust – commonly referred to as the trust maker, grantor, settlor, or trustor – transferring his or her ownership of certain assets to the trust. A trustee is then appointed to manage these assets for the beneficiary (or beneficiaries) of the trust. In a “standard” revocable living trust, you are the trust maker, the trustee, and the beneficiary while you are alive.
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Most parents want to make sure their children are provided for in the event something happens to them while the children are still minors. Grandparents, aunts, uncles, and good friends sometimes want to leave gifts to beloved young children too. Unfortunately, good intentions and poor planning often have unintended results. Don’t make these common, expensive mistakes. Instead, here’s how to both protect and provide for the children you love.
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You work hard for your money and want to ensure that your wealth distribution goes according to your wishes upon death. Sadly, many people simply don't understand the difference between wills and trusts and how they can affect inheritance. Don’t be one of them! Take control of your wealth distribution by understanding what wills don’t control and the benefits of a trust.

5 Things a Will Does Not Control

Most people believe that a will encompasses and controls all of your assets. That is simply not the case.
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Confused about the differences between wills and trusts?  If so, you’re not alone. While it’s always wise to contact experts like us, it’s also important to understand the basics. Here’s a quick and simple reference guide:

What Revocable Living Trusts Can Do – That Wills Can’t

●      Avoid a conservatorship and guardianship. A revocable living trust allows you to authorize your spouse, partner, child, or other trusted person to manage your assets should you become incapacitated and unable to manage your own affairs. Wills only become effective when you die, so they are useless in avoiding conservatorship and guardianship proceedings during your life.
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Trusts  allow you to avoid probate, minimize taxes, provide organization, maintain control, and provide for yourself and your heirs. In its most simple terms, a trust is a book of instructions wherein you tell your people what to do, when.

While there are many types of trusts, the major distinction between trusts is whether they are revocable or irrevocable. Let’s take a look at both so you’ll have the information you need:

Revocable Trusts. Revocable trusts are also known as “living trusts” because they benefit you during your lifetime and you can alter, change, modify, or revoke them if your circumstances or goals change.
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