The Revocable Living Trust

By Roy Schneider, Esq.

There are many benefits to a revocable living trust that are not available in a will.  An individual can choose to have one or a combination of both, and an attorney can best clarify the advantages of each.  If the person engaged in planning his or her estate wants to retain the ability to change or rescind the document, the living trust is probably the best option since it is revocable.

The document is called a “living” trust because it is applicable throughout one’s lifetime.  Another individual or entity, such as a bank, or private fiduciary, can be appointed as trustee to manage and protect assets and to distribute assets to beneficiaries upon one’s death.

A living trust may also be designed to protect certain assets following the death of the settlor (the person who created the trust) by maintaining them within the trust for a specified time or upon the occurrence of some event, such as a beneficiary reaching a certain age.  The provisions for a continued trust after death can be used, not only to protect assets against creditors, but also from a beneficiary’s own improvidence, such as drug or alcohol dependency.

It should be noted, that the revocable power that comes with the trust may involve taxation. Usually, a trust is considered a part of the decedent’s estate, and therefore, an estate tax applies, should the assets on death be above the applicable exemption amount.  One cannot escape liability via a trust because the assets are still subject to debts upon death.  On the upside, the trust may not need to go through probate, which could save months of time and attorneys’ fees.

The revocable living trust is contrary to the irrevocable living trust, in that the latter cannot be rescinded or altered during one’s lifetime.  It does, however, if properly set up, avoid the tax consequences of a revocable trust.  An estate planning attorney at Schneiders & Associates, L.L.P. can explain the intricacies of other protections an irrevocable living trust provides.

Anyone who wants to keep certain information or assets private, will likely want to create a living trust.  A trust is not normally made public, whereas a will is put into the public record once it passes through probate.   Consulting with an attorney can help determine the best methods to ensure protection of assets in individual cases. Contact our office today to receive our Estate Planning Questionnaire and to schedule a no charge estate planning consultation.