You have various different options when you are planning your estate. You can use a last will to record your final wishes regarding the transfer of your property, but it is not your only choice. Even if you are not wealthy, you may want to consider the creation of a revocable living trust as a vehicle of asset transfer.
Probate Avoidance
Probate is a legal process. When you use a last will to direct the transfer of your property, the will must be admitted to probate. During probate the court determines the validity of the will. This court will supervise the administration of the estate.
There are some pitfalls that go along with the probate process. The heirs to the estate will not receive their inheritances until the estate has been probated and closed. Probate can be a time-consuming process. Waiting for an inheritance can be an inconvenience to some people, but it can create hardships for others.
There are also significant expenses that can accumulate during the probate process. Money that is spent during probate is money that would have otherwise gone to the heirs to the estate.
When you use a revocable living trust to facilitate the distribution of your financial resources after you die, the distributions will take place outside of probate. As a result, the beneficiaries that you name in the trust agreement will receive their inheritances in a much more timely manner.
The avoidance of probate is probably the single most compelling reason to consider the creation of a revocable living trust.
Incapacity Planning
A significant percentage of seniors become unable to handle their own affairs late in their lives due to incapacity. When you create a revocable living trust, you can include the selection of a disability trustee. This person or entity would be empowered to administer the trust in the event of your incapacitation.
Ongoing Control
Some people think that you surrender all control of assets that you convey into a trust. This is not true when it comes to revocable living trusts.
Because the trust is revocable, it can be dissolved at any time. You as the person creating the trust (the grantor) can revoke the trust and go forward in direct personal possession of assets that you had conveyed into it.
The grantor may also change the terms of the trust. You can add or subtract beneficiaries any time you want to, and you can change the way that assets will be distributed after your death.
This ongoing control is part of the appeal of revocable living trusts. You facilitate the transfer of assets outside of probate, and you can account for the possibility of incapacitation, but you don’t lose control of the property while you are living.
To learn more about revocable living trusts and estate planning, we invite you attend one of our free seminars or workshops. For more information, follow this link: Free Estate Planning Seminar and Workshops
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