WHAT IS A REVOCABLE OR “LIVING” TRUST?

A Revocable Trust can be used as your main estate planning document instead of a Last Will. It is important to note that if you have a Will, the probate process must be used to administer the Will. A Will does not avoid probate. If you have a revocable trust you can avoid the probate process by titling your assets in the name of your trust. If assets are owned by a trust, no court is involved in the transfer of assets upon death. Therefore, no estate has to be opened with the court, no newspaper notices or letters to heirs are required, no records become public and no statutory waiting periods apply. It is still necessary to determine what assets exist, to pay creditors, to file required tax returns and to distribute assets to beneficiaries. However, with a trust, the person you name as trustee can accomplish these things without having to go through court proceedings and statutory requirements to do so. This simplifies and expedites the process for your heirs.

A revocable trust does not affect your ability to manage and control your own property while you are alive. You remain in charge of everything. A revocable trust is acceptable in all states, so you can avoid probate on out-of-state property as well as assets located in the state of residence. (A will requires probate in each state where real estate is owned (this includes timeshares) and in the state where the decedent lived on the date of death.)

A revocable trust also provides for management of assets if you are unable to manage assets due to health problems. This avoids the necessity and expense of your family members having to go to court, and ask to have you found incompetent and to be named your guardian or conservator. A Will only takes affect at your death and can not provide for management of your assets should you become legally incompetent during your life.

A revocable trust works well for single or married people.

Because you would still be in charge of managing your assets, a revocable trust does not offer asset protection against from creditors.

As with all estate planning, each person’s individual situation and wishes must be analyzed before a decision is made as to the most effective estate planning techniques.

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