A revocable living trust is a living trust. This is a trust or legal entity that houses an individual’s assets. To create a living trust, you are the grantor. Since it is a living trust, you can also be the trustee. You are the one that can control any of the assets within the trust. Now, some grantors do have an attorney or other institution that serves as the trustee. Though, this is not common and not necessary for a revocable living trust. So, how does a revocable living trust work?
Living Trusts While the Grantor Is Alive
Unlike other forms of trusts, when you have a living trust, you are able to claim any of the assets that you put into it. You still have control over your assets. Now, when you have an irrevocable trust, the trust itself has its own taxpayer identification number. With a living trust, you share the same social security number as your trust. This means that you still have the assets and these assets could be subject to creditors.
Living Trusts While Grantor Is Incapacitated
If you suffer incapacitation, then you should have a successor trustee that can handle your trust. If you become unable to make financial decisions for yourself or if you can no longer manage the trust, then you can allow the successor to take over. This should be someone you trust to manage your assets and that you know will make wise financial decisions for you.
Living Trusts After Grantor’s Death
When you die, the trust automatically becomes a revocable trust. The successor trustee would step up in this case too. Only this time, he or she would be using the assets to pay off any final bills or taxes. In addition, he or she would be distributing assets to the beneficiaries. Your successor trustee’s instructions should be with the rest of the trust formation documents.
If you are considering a living trust, there are a lot of advantages to it. The best way to figure out the type of trust that will serve your needs is to talk with an estate planning lawyer. A lawyer can help you through the creation of your trust and can even help you decide which trust would be best for you. To find out whether a revocable living trust is in your best interests, contact a trust lawyer in Cherry Hill, NJ as soon as possible.
Thanks to Klenk Law for their insight into estate planning and living trusts.