When contemplating your estate planning options, you may wonder, “Do I need a revocable living trust?” Particularly, you might worry about the ease with which your heirs will inherit and manage their portions of your estate. A revocable living trust (RLT) offers a flexible solution, allowing you control over your assets even after your passing.
A revocable living trust is a legal arrangement in which you appoint a trustee to handle and oversee your assets. As the creator of the trust, or the grantor, you can also act as the trustee during your lifetime, maintaining control over your assets.
While you can also use a will to determine how you want your assets to be distributed, it is limited in its capabilities. These limitations can leave significant gaps in your estate plan that could cause delays or issues in the distribution of your estate. However, you can circumvent its limitations by combining a will with a living trust.
There are many advantages of a living trust. Below, our Texas estate planning lawyers outline nine reasons why you need a revocable living trust for you and your primary beneficiaries.
By definition, a revocable living trust can be modified to address changing life circumstances. You have the flexibility to add or remove assets from the trust while you are still alive. If a dramatic change in circumstances affects your estate plan, you can modify or even dissolve the trust.
For example, you can create a revocable living trust now and update it as your family grows and the value and presentation of your bequests change. The trust becomes irrevocable after death, preventing any further alterations to it.
2. Keep Your Privacy
A living trust will remain a private family matter if you become incapacitated. Upon your passing, there is no need to put declarations on paper to welcome potential creditors, document claims challenges to your will, or advise disappointed family members. Your recipients remain undisclosed.
When everything has to pass through probate, the public divulgence of your property, resources, and beneficiaries is inevitable. The best way to keep your estate assets private is to avoid probate when possible. In contrast to a will, a trust report remains private and allows the transfer of your resources without public divulgence.
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3. You Keep Control
Your revocable living trust should contain directions for dealing with your resources and utilizing your assets in the event of your death or incapacity. As long as you remain capable, you have complete control of the trust’s assets. You can purchase, use, spend, or give away your property as you decide. You can sell property, change your recipients or legal administrator, or even repudiate the trust with proper estate planning legal counsel.
Creating a trust requires more upfront costs than creating a will. However, in the long-run, it is more affordable.
Remember, probate expenses are a piece of the cost of settling your legacy with a will. With a trust, your family saves substantial expense after your passing by avoiding the costs associated with probate.
Your Texas estate planning attorney can also advise you on how to structure the trust for tax savings. With careful planning, you can reduce or eliminate the costs associated with settling your estate with a well-crafted revocable living trust.
Any assets accumulated throughout your life become part of your estate when you die. With a valid will, the property is distributed to your heirs after the probate process. However, your estate must go through probate before the distribution or transfer of any assets.
Your will becomes public information, and your loved ones must appear in court, where the judge will decide whether the will is legitimate and authentic. Probate can be an extensive and costly interaction.
However, you can bypass the probate process by placing a substantial portion of your property into a revocable living trust. Many clients need a will in addition to a well-crafted trust. If you have both, the property held in the trust will remain out of probate, allowing it to reach the hands you intend it for faster and with less expense. One of many excellent reasons to have a revocable living trust is if you own property in more than one state. Having properties in multiple states without a trust can lead to a tedious, time-consuming, and expensive multi-state probate process. Your heirs will deal with multiple attorneys and court systems to receive their inheritance.
