The Workings of a Revocable Living Trust
Planning what happens to your estate after you die is a crucial step in ensuring the welfare and financial stability of your loved ones. If you fail to make an estate plan, you could leave your property and assets in the hands of the state, which means that your belongings and money may go to someone you never intended. As you make your plan, the idea of a trust (instead of a will) may become a part of the discussion. What exactly is a living trust? How is it different from a revocable one? Do you need it?
Here’s a breakdown of how a revocable living trust works.
Living Trusts
A living trust allows you to pass on your assets through a trustee while you are still alive. The trustee can be yourself or another person, but that person is responsible for deciding where your estate ends up. As the name suggests, a living trust is managed while you are still alive. A living trust can offer you more control over your estate than a will, but it can also be more expensive and requires more work.
Revocable Living Trusts
Revocable refers to your ability to change the details of the trust whenever you want. If you decide you no longer want an heir to inherit, you can remove them from your trust as a beneficiary. You also have the power to change who receives what assets and add other beneficiaries. Since you are most likely the trustee of your trust, you can do this at your leisure.
Creation of a Revocable Trust
To make this kind of trust, prepare to do the grunt work now (to make things easier later). First, add up all of your assets, including property, bank accounts, investments, etc. Assign a trustee to be in charge of the trust and choose beneficiaries whom you want to pass things down to. You will then need to create a document that officially designates your trust.
Discussions With a Lawyer
Unlike a will, a revocable living trust can be far more confusing and requires much more hands-on work. It can be easy to make a mistake while creating your trust, which could cause a ripple effect that makes things much harder for your loved ones after you pass. Talk to a lawyer to confirm that your trust is in order and to discuss any other important estate plans that might benefit you and your heirs. If you think that a living trust lawyer in Folsom, CA may be of help to you, then consider a lawyer from a firm like Yee Law Group, PC to assist you with your trust.