A trust is a written document that names one or more individuals to be responsible for managing property for the benefit of others.  A revocable trust, sometimes called a living trust, is one of many possible types of trusts and estate planning tools.  Much like a will, a revocable trust may be simple or complex.  Individuals with many different levels of wealth may consider utilizing a revocable trust.  It is called a “living trust” because it is established during one’s lifetime.  It is “revocable” because the grantor, the person that established the trust, retains the right to revoke the trust while alive and competent.  A revocable trust generally becomes irrevocable upon death of the grantor.

Multiple parties are involved in the creation of a trust and the carrying out of its terms.  The grantor is the person who creates the trust–usually you.  The trustee is the person who agrees to manage the property owned by the trust.  Generally, the grantor of a revocable trust also serves as the trustee while he or she is alive.  Additional persons are named to serve as successor trustees.  Any competent adult may serve as a trustee.  The beneficiaries are the individuals that will receive the benefits of the trust.

Revocable trusts are not appropriate for all persons.  They are, however, advantageous in that any assets funded into a revocable trust will avoid probate upon death.  Revocable trusts are also advantageous if you desire to put restrictions on any assets that your heirs may inherit.

The following are examples of what a revocable trust could do for you:

  • Provide for the financial management of your property.
  • Provide property management if you become unable to manage your own affairs.
  • Provide for minor children in the event of your untimely death.
  • Provide for the non-probate transfer of assets to beneficiaries.
  • Provides a faster timeline for distributing assets to beneficiaries.
  • Provide for reduced estate taxes in certain estates.

Contrary to popular belief, a revocable trust cannot do the following:

  • Save any income taxes.
  • Protect against claims by your creditors during your lifetime.
  • Avoid nursing home costs or protect property from estate recovery.

It is also important to note that a revocable trust does not eliminate the need for a will.  Nor does it eliminate the need for a general durable power of attorney for finances.

If you would like to discuss revocable trusts with a qualified attorney, please contact Sturgul & Long to schedule a consultation.