One of the main benefits of a Revocable Living Trust that’s often overlooked is the ability to build mental disability planning right into the trust. The trust can specify how your mental incapacity should be determined, how you should be taken care of if you do become disabled, and who will be able to manage your property as your Disability Trustee. This will keep you and your property outside of a court-supervised guardianship or conservatorship. Not all Revocable Living Trusts are created equally.
- Has it been more than 3 years since you reviewed your estate plan, including your will, life insurance policies and any other documents?
- If you or your spouse passed away today, are you uncertain about what would happen to your property?
- If you became incapacitated, would your family have to go through court proceedings to carry on your affairs?
- Do you have minor children or other people who are dependent on you?
- If a death occurred and court approval was required to release accounts for working capital, could it disrupt your business or family life?
- Would you like to avoid probate of your estate?
- Does your life insurance or other accounts name a minor child as a beneficiary?
- Do you have children by a previous marriage?
The difference between a revocable and irrevocable trust is as follows:
Revocable Living Trust – With a revocable living trust, you transfer your assets into the ownership of the trust. You retain control of those assets as the trustee of your revocable living trust. You can change or revoke the trust at any time you want.
Irrevocable Living Trust – An irrevocable trust allows you to permanently and irrevocably give away your assets during your lifetime. After you give away these assets, you have relinquished all control and interest in these assets.
A properly written and funded living trust can offer the following benefits:
- Avoids probate at death, including multiple probates if you own property in other states.
- Prevents court control of assets at incapacity.
- Brings all of your assets together under one plan.
- Provides maximum privacy.
- Quicker distribution of assets to beneficiaries.
- Assets can remain in trust until you want beneficiaries to inherit.
- Can reduce or eliminate estate taxes.
- Can be changed or cancelled at any time.
- Difficult to contest.
- Prevents court control of minors’ inheritances.
- Can protect dependents with special needs.
- Professional management with corporate trustee.
- Provides peace of mind.
Probate is a court-supervised process used to validate your will and distribute your property. The process takes anywhere from 6 months to over 2 years to complete, and may require that lawyers or other professionals be hired. Even if you die without a will, your estate must still pass through the probate system.
- Your will is filed with the probate court and becomes a public record.
- Your executor inventories your property.
- Your property is appraised.
- All debts, including death taxes, are paid.
- The court validates your will.
- Court costs, attorneys’ fees, and executors’ fees are paid from your estate.
- Then, and only then, the remaining of your estate is distributed to your loved ones.