Revocable Living Trusts Explained
A revocable living trust is a legal document that allows you to place your assets—like your home, bank accounts, and investments—into a trust during your lifetime. As the creator of the trust, you can manage these assets and make changes as needed. “Revocable” means you can alter or dissolve the trust at any time while you are alive.
Key Features:
- Control: You remain in control of your assets while you’re alive. You can buy, sell, or transfer property within the trust just like you would outside of it.
- Flexibility: Life changes—marriage, divorce, the birth of a child—may prompt you to adjust your trust. A revocable living trust makes this easy.
- Privacy: Unlike a will, which becomes public record after death, a revocable living trust generally remains private. This means your estate plan can stay confidential.
- Avoiding Probate. A revocable trust can transfer assets on your death without a probate. Probate is the court process that validates a will and governs the distribution of a person’s property after death. A Washington probate may be relatively efficient and inexpensive compared to probate in other jurisdictions. However, if you own property in multiple jurisdictions, a revocable living trust can make sense because it avoids opening a probate in each state where you own property.
How Does a Revocable Living Trust Work?
Setting up a revocable living trust typically involves the following steps:
- Drafting the Trust Document: This legal document outlines how your assets will be managed and distributed. You should work with an attorney who specializes in estate planning to draft your revocable living trust.
- Funding the Trust: After creating the trust, you’ll need to transfer your assets into it. This might include transferring your home to the trust by deed or moving funds from your bank accounts into the trust.
- Managing the Trust: As the trustee (the person who manages the trust), you can continue to use your assets as you normally would. You should also name a successor trustee—someone who will take over management of the trust if you become incapacitated die.
- Distributing the Assets: After your death, the successor trustee will manage the trust according to your wishes, distributing the assets to your beneficiaries.
Conclusion
Revocable living trusts can be an invaluable part of your estate planning toolkit. They offer flexibility, control, and the potential to simplify the transfer of your assets. If you’re considering your options, consulting with an estate planning attorney can help you determine the best course of action for your situation.
To learn more about Revocable Living Trusts, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.