If you want to maintain control of your assets while you are living as you simultaneously facilitate fast and efficient asset transfers after you pass away, you may want to consider the creation of a revocable living trust.
Let’s look at some of the benefits in detail.
You may take pause before creating a trust, because you are under the impression that you would no longer have control of the assets in the trust.
There are irrevocable trusts, and revocable trusts. If you create an irrevocable trust, you are giving up direct personal control, because you cannot dissolve the trust and take the assets back.
These trusts are useful for people who have estate tax concerns. The assets in the trust would no longer be part of the taxable estate, because the grantor did surrender control.
Irrevocable trusts are also used for asset protection purposes.
Things are different with a revocable living trust. The trust is revocable, so you can dissolve the trust at any time and walk away with the assets.
The control does not stop there. As the person creating the trust, you can act as the beneficiary and the trustee initially. You make all decisions, and you can use the assets in the trust without dissolving it.
The grantor of the trust can also change the terms, add or subtract beneficiaries, and otherwise make changes along the way.
If you use a last will instead of a living trust, the will must be admitted to probate after you die. This is a time-consuming and often times expensive legal process.
On the other hand, if you use a revocable living trust, the trustee that you choose to take over the role after you die can distribute assets to the beneficiaries outside of probate.
With a revocable living trust, you create a trust agreement. In the agreement, you leave instructions that the successor trustee must follow after you die.
You may or may not want the beneficiaries to receive lump sum inheritances. If you want to make sure that the beneficiaries do not burn through their inheritances too quickly, you could instruct the trustee to distribute assets in a measured fashion over a number of years.
Incapacity is common among elders. When you create a revocable living trust, you could empower the successor trustee to administer the trust if you were to become incapacitated at some point in time.
Learn More About Living Trusts
If you think that you may want to create a revocable living trust, we can answer your questions. Our firm offers free consultations, and you can send us a message through this page to set up an appointment: Southampton PA Estate Planning Attorneys.
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