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:
Contrary to popular belief, a revocable trust cannot do the following:
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, S.C. to schedule a consultation.
A complete estate plan should consist of more than just a will. It is important to understand that a will, in itself, does nothing to avoid a probate proceeding when you pass away. Furthermore, you may become incapacitated before you die and it is important that someone else has legal authority to make health care and financial decisions on your behalf under such circumstances. Please click on a topic below to learn more about it. In our estate planning practice, the following documents are often used to form a comprehensive estate plan: