Revocable Living Trusts can be very useful estate planning tools.
First, it is important to understand that when you transfer title of your property to the trust, you usually name yourself as trustee. This allows you to have control of the assets and not too much changes in day-to-day management of the property.
The permanency of something like this scares people, but with a Revocable Living Trust you can revoke the trust while you are alive and mentally capable, reverting the property back to your ownership. This isn't frequently done, but it makes for a nice option in case you need it, and it helps reassure people.
If you become mentally incapacitated and are unable to act as trustee, a successor trustee takes over your duties in managing the trust. That person is called a successor trustee. The successor trustee will be responsible for handling financial issues of the trust because you are unable to. This successor trustee would be someone that you trust -- often a spouse. Additionally, there is usually a "fall-back" second successor trustee in case the first trustee can't perform the required duties.
Now imagine that you die. Normally, an estate without it's property put into a trust would go through probate. This usually requires a probate attorney and the overall fees associated with probate vary from a couple hundred dollars to tens-of-thousands of dollars, depending on the size of the estate. This is money that comes out of the estate and therefore is money that your heirs will not receive. Add to that the fact that it may take many months to finish probate, and the details of the probate proceedings are available in the public record to anyone that wants to see them.
But if you had created a Revocable Living Trust, you would have avoided probate, which is the primary benefit. You would have named successor trustees in case of mental incapacity, and upon death the successor is responsible for distributing the trust assets to the beneficiaries as specified in the trust.
You can see how a Revocable Living Trust would be attractive to someone faced with having their estate go through probate. Forming the Revocable Living Trust is often a very smart decision, even if it costs money in the short term. In the long run it saves time, money, privacy, and headaches. Talk to an estate planning attorney in your estate to see what is best for your particular needs.
First, it is important to understand that when you transfer title of your property to the trust, you usually name yourself as trustee. This allows you to have control of the assets and not too much changes in day-to-day management of the property.
The permanency of something like this scares people, but with a Revocable Living Trust you can revoke the trust while you are alive and mentally capable, reverting the property back to your ownership. This isn't frequently done, but it makes for a nice option in case you need it, and it helps reassure people.
If you become mentally incapacitated and are unable to act as trustee, a successor trustee takes over your duties in managing the trust. That person is called a successor trustee. The successor trustee will be responsible for handling financial issues of the trust because you are unable to. This successor trustee would be someone that you trust -- often a spouse. Additionally, there is usually a "fall-back" second successor trustee in case the first trustee can't perform the required duties.
Now imagine that you die. Normally, an estate without it's property put into a trust would go through probate. This usually requires a probate attorney and the overall fees associated with probate vary from a couple hundred dollars to tens-of-thousands of dollars, depending on the size of the estate. This is money that comes out of the estate and therefore is money that your heirs will not receive. Add to that the fact that it may take many months to finish probate, and the details of the probate proceedings are available in the public record to anyone that wants to see them.
But if you had created a Revocable Living Trust, you would have avoided probate, which is the primary benefit. You would have named successor trustees in case of mental incapacity, and upon death the successor is responsible for distributing the trust assets to the beneficiaries as specified in the trust.
You can see how a Revocable Living Trust would be attractive to someone faced with having their estate go through probate. Forming the Revocable Living Trust is often a very smart decision, even if it costs money in the short term. In the long run it saves time, money, privacy, and headaches. Talk to an estate planning attorney in your estate to see what is best for your particular needs.
About the Author:
Nick Wroblewski is a Chicago estate planning attorney and owner of law firm Windy City Esquire, Ltd. If you reside in Illinois and have estate planning questions, feel free to contact Nick. Information is also available on Nick's blog. If you reside outside of Illinois, contact an attorney near you for estate planning assistance.
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