In this post we will look at a very commonly used estate planning device called a revocable living trust. These trusts can be useful for people of relatively ordinary means, and they are quite effective if you want to facilitate efficient asset transfers to your loved ones.
There are people who think that you surrender all control of assets that you convey into any type of trust. In fact, this is not the case with a revocable living trust.
Look at the name of the trust: it is revocable, so you can dissolve or rescind the trust at any time. If you were to do this, it would no longer exist, and property that had been conveyed into the trust would once again become your direct personal property.
This is not the only way that you control the trust. The person who is creating a revocable living trust is referred to as the grantor of the trust. There is a trustee would administers the trust, and a beneficiary who receives monetary distributions from the trust.
It should be noted that there could be multiple beneficiaries, and there could theoretically be multiple trustees.
The grantor of the revocable living trust can act as the trustee and the beneficiary initially. You control the actions of the trust as the trustee, and you can accept monetary distributions from the trust throughout your life.
Ultimately, the goal is to facilitate asset transfers to your loved ones after you pass away. To make this happen, you name a successor trustee and a successor beneficiary or beneficiaries.
Many people will use a corporate trustee, like a bank or a trust company. When you do this, there are no longevity concerns, and there will be no conflicts of interests. The successor beneficiaries would be the heirs that you want to provide for after your passing.
After you do in fact expire, the successor trustee will distribute assets to the beneficiaries in accordance with your wishes as stated in the trust agreement.
These distributions would not be subject to the legal process of probate. As a result, the beneficiaries would receive their inheritances in a timely and efficient manner.
If you were to use a last will rather than a revocable living trust as a vehicle of asset transfer, the probate process would come into play. The process could take close to a year in simple, straightforward cases, and the heirs to the estate would not receive their inheritances while the estate was being probated.
Learn More About Revocable Living Trusts
We have provided a basic overview in this post. If you would like to learn more about revocable living trusts, contact our firm to request a free consultation. You can click this link to schedule an appointment: Campbell CA Estate Planning Attorney.