People sometimes do not consider the possibility of creating a living trust because they harbor certain misconceptions. One of these misconceptions is the notion that you surrender all control of property that you convey into a revocable living trust.
This is simply not the case. When you create a revocable living trust, you are not surrendering control of the assets while you are living. A trust consists of the grantor, which is the person who creates the trust; a trustee who administers the trust; and a beneficiary who receives monetary distributions from the trust.
You as the grantor of a revocable living trust may act as both the trustee and the beneficiary while you are still alive and of sound mind. As such, you control the actions of the trust. You can convey assets into the trust, remove assets from the trust, and give yourself monetary distributions if and when you see fit.
The control does not stop there. Because the trust is in fact revocable, you can revoke or rescind the trust at any time, and it would no longer exist.
Benefits of Revocable Living Trusts
You do not have to shy away from a revocable living trust because of a lack of control, but you may wonder what benefits you would derive from such a trust. The primary benefit that you gain from a revocable living trust is the avoidance of the process of probate.
When you maintain personal possession of your property through to the time of your death, it becomes probate property after you pass away. It is not distributed to the heirs to the estate that you name in your will until the process of probate has run its course.
There are a few drawbacks that come along with the probate process. For one, the goings-on are a matter of public record, and you may want your final affairs to be conducted privately.
Secondly, there are considerable costs that can accumulate during the probate process.
Lastly, probate can be quite time-consuming. The exact duration of the process is going to vary on a case-by-case basis depending on the complexly of the estate in question. At minimum it is going to take a number of months.
Another advantage that you gain when you create a revocable living trust is the ability to name a disability or successor trustee. This individual or fiduciary entity would be empowered to administer the trust in the event of your incapacitation.
- How Estate Planning Can Help with Probate Avoidance - March 29, 2023
- How Is Estate Planning Different for Women? - March 8, 2023
- Is It Time to Consider Guardianship? - March 1, 2023
See Larger Map