Living Revocable Trust
A Living Revocable Trust is a great tool to simplify your estate plan while you are living, and then peacefully transfer your estate to your beneficiaries after you pass away. The transfer of the estate is easier because the revocable trust eliminates the need to go through Probate of the decedent’s estate. Probate is the legal process used to ensure the estate is handled properly after a person passes away. It involves making court appearances, paying debts, inventorying the estate, and dealing with creditors. The amount of time and money spent for Probate varies depending on the specific case; however, it is not uncommon for Probate to take several months, even years, and cost several thousand dollars. Many people who choose to have a Living Revocable Trust do so specifically to avoid Probate for their family members. They recognize the time and money they can save their family members in the future by setting up a Living Revocable Trust now.
The Living Revocable Trust is created by the Grantor, who serves as the Trustee (Manager), and the Beneficiary, the party who benefits from the Trust. As the name of the Trust implies, it is fully revocable during the lifetime of the Grantor. After the trust is initially created, ownership of all of the Grantor’s real and personal property are transferred into the name of the Trust. Houses, other real estate properties, bank accounts, 401ks, IRAs, and life insurance can all be moved into the Trust. All of these accounts and properties continue to operate in the same manner as before without any change in tax status or other issues. As property is sold or purchased, the titles to the properties are transferred into or out of the name of the Trust. When the Grantor passes away, the Trust can simply terminate and distributions can be made to the beneficiaries. There is no need to go through Probate because all the assets are still titled in the name of Trust.
People who own multiple pieces of real estate, real estate in more than one state, their own business, or even a share in a business should strongly consider a Living Revocable Trust. Additionally, people who simply want to protect their beneficiaries from having to deal with the Probate process should consider a revocable trust.