Revocable living trusts provide a number of different benefits. In this blog post, we will emphasize the ability for a living trust to allow you to protect a spendthrift heir (a spendthrift is a person who spends money in an extravagant or irresponsible way).
When you have a revocable living trust, you as the grantor can act as the trustee and the beneficiary while you are alive and well. You name a successor trustee when you draw up the trust declaration, and you also name successor beneficiaries.
This trustee could be someone that you know personally, but many people use a professional fiduciary like a trust company or the trust department of a bank.
You have the ability to leave behind specific instructions that the trustee must follow after your passing with regard to asset distributions. If you are concerned about the beneficiaries spending their inheritances too quickly, you can instruct the trustee to distribute assets on a limited basis over an extended period of time.
For example, you could have the trustee distribute the earnings from the trust assets while the principal remains intact. Perhaps you could give the trustee the discretion to distribute assets from the principal under certain circumstances. Such circumstances could include any number of things, including graduating from college or trade school, maintaining full-time employment, or other milestones you feel are important for a beneficiary to accomplish.
If you want to, you could loosen the purse strings as it were and allow for larger, lump-sum distributions when the beneficiaries reach certain age thresholds.
These are just a few examples, but you do have the latitude to leave behind specific instructions when you are creating the living trust agreement, and this can provide you with a great deal of peace of mind.
We should point out a couple of additional benefits that you gain when you utilize a revocable living trust as a vehicle of asset transfer. One of them is the ability to empower the successor trustee to administer the trust in the event of your incapacitation.
Another major benefit is the avoidance of probate. If you were to use a last will to state your final wishes regarding asset distributions, the probate court would supervise the administration of the estate. Inheritances would not be distributed until after this process was completed and it will take close to a year at minimum in most cases.
Free Report on Revocable Living Trusts
You may want to learn more after reading about the benefits of revocable living trusts in this post. We have prepared an in-depth special report that can provide you with detailed information on the subject.
To get your copy of the special report, click this link and follow the simple instructions: Free Living Trust Report.
Free Living Trust Seminars
We regularly offer free Living Trust seminars and invite you to register for an attend one of these informational events. To see a list of upcoming seminars, follow this link: Free Seminars and Workshops.