A Revocable Living Trust is a legal document that includes instructions for who you want to handle your final affairs and who you want to receive your assets after you die.
A Revocable Living Trust, similar to a Will, provides your wishes and preferences in writing. However, there is a difference. A Revocable Living Trust is a private disposition of your assets that does not need to be submitted to the Register of Wills. A Last Will and Testament is a public document that must be submitted to the Register of Wills for probate proceedings.
Often a Revocable Living Trust is used as a substitute for a Will to avoid the probate administration process. However, a will and revocable living trust often complement each other. Thus, a pour-over Will is used along with a Revocable Living Trust to make sure that all assets, even those that were not titled in the name of your Trust during your lifetime, will still be distributed pursuant to your wishes as indicated in your Revocable Living Trust.
The Revocable Living Trust holds your assets during your lifetime. You retain full control over your assets and can do everything you could do before, including buying and selling. Nothing changes but the names on the titles.
During your lifetime you can alter, add, change, or terminate your Revocable Living Trust as long as you are deemed competent at that time. However, the preparation of proper official documents may be required.
At your death, your Revocable Living Trust becomes irrevocable and is no longer able to be amended or changed. The Trustee you appointed in your Revocable Living Trust will take over the duties and distribute the assets according to your wishes. Please note that all of the assets that were in your Trust will still be considered in your estate for tax purposes.
- A Revocable Living Trust is private-while a Will, upon death, becomes public and can allow anyone to see who the beneficiaries are and how much they inherited.
- A Revocable Living Trust gives you-not the courts-control over the assets you leave to your minor children and grandchildren.
- It may help you to avoid probate.
- A Revocable Living Trust prevents the court from controlling your assets at incapacity as you appoint a Trustee to take care of your assets for you in case you are incapable of doing so.
- It can be a helpful tool for family harmony.
- A Revocable Living Trust can be used to avoid ancillary estate proceedings if you own real property in a jurisdiction other than in a jurisdiction in which you are domiciled.
- A Revocable Living Trust offers more structure than a Power of Attorney because it has definite trust terms for the trustee to follow.
- The creation of Revocable Living Trust is not a gift for gift tax purposes.
- There are many more benefits to weigh into your decision.
If you have a Revocable Living Trust and are your own trustee, everything you put in the trust will continue to be taxed using your social security number during your lifetime. The income will appear on your tax return just as it was before you put assets in your Revocable Living Trust.
Deciding what will happen to your home, your financial assets, and your personal possessions during your incapacity and/or after your passing can be a difficult process. However, if you don't take the time to make these decisions now, a court may end up taking control and/or dividing up your property for you. We're here to provide the information you need to help you make your best decisions.
For a more detailed discussion on whether you need a Will or a Revocable Living Trust, as well as other general questions about your estate planning, please schedule a free consultation with Avrine Law Firm today or Contact us at 240.395.1366.
Our Clients Say...
It has been an absolute pleasure dealing with this law firm. I found Iryna to be very thorough and honest, as well as caring! Hard to find these qualities in an attorney now days. Thank you for all your help setting up our trust! Superb!