The legal device known as the revocable living trust can provide many different estate planning advantages. In this post we will provide an explanation so that you understand why you may want to consider the creation of a living trust.
Incapacity Planning
Many people become incapacitated late in their lives. Alzheimer’s disease is a leading cause of incapacity, but it is not the only cause. Once you reach your eighties, you may well become unable to make sound decisions on your own.
If you have a revocable living trust in place, you can name a disability trustee. This person or entity would be empowered to administer the trust if you were to become incapacitated at some point in time.
If you don’t plan ahead for possible incapacity, a guardianship hearing could be convened. Ultimately, the state could appoint a guardian to manage your affairs. You may not approve of the person who is chosen to act as your representative, and family members could have disagreements during the proceedings.
Avoidance of Probate
You may assume that assets are transferred more or less immediately after your passing if you state your final wishes in a last will. In fact, this is not the case. The executor or personal representative must admit the will to probate.
During probate the Surrogate’s Court would supervise the administration of the estate. This process can be time-consuming and expensive.
When you use a revocable living trust to facilitate future asset transfers, the trustee that you name in the agreement would follow your instructions. Assets would be distributed to the beneficiaries in a timely manner, because the probate process would not be a factor.
Ongoing Control
People sometimes ignore the possibility of creating a trust, because they are under the impression that they would surrender control of the assets in the trust. This is true to some extent with irrevocable trusts, but revocable trusts are different.
The person creating the trust is called the grantor. If you are the grantor of a revocable living trust, you can initially act as the trustee and the beneficiary. As a result, you do not lose control of the assets that you have conveyed into the trust.
Plus, you can actually dissolve the trust at any time, because it is revocable.
You name a successor trustee to administer the trust after you pass away, and you name successor beneficiaries. As stated previously, the successor trustee could distribute assets to the beneficiaries outside of probate.
Learn More About Living Trusts
If you are interested in creating a revocable living trust, download our special report. This report will answer most of your questions, and it is being offered free of charge.
Simply click this link to obtain access to your copy: Smithtown NY Living Trust Report.
Mark S. Eghrari, Estate Planning Attorney
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