While a will is a very popular method of passing an estate to one's beneficiaries, a revocable living trust is arguably a better option. Our California estate planning team tells you everything you need to know about this useful tool below.
What is a Revocable Living Trust?
A revocable trust is established when the grantor signs a trust agreement naming a trustee to administer the trust. Grantors also have the ability to be a trustee as well, however, a co-trustee must also be named in order to ensure the consistency of management in the event of death or incapacitation. Naming a trust company or even a bank as the trustee, rather than an individual, ensures that a qualified trustee will always be available to act in the grantor's best interests.
In most cases, grantors retain certain rights over the trust during their lifetime. These generally include:
- The right to direct the trustee to distribute all or any portion of the trust property, in accordance with the grantor's wishes
- The right to change or revoke the trust at any time
The trustee's powers typically include the right to make discretionary distributions of income and principal to the grantor and, at times, their family if the grantor becomes incapacitated.
When the grantor passes away, the trust acts much like a will, and the property is distributed to its beneficiaries as outlined within the agreement.
The Benefits of a Revocable Living Trust
Having a revocable living trust has both immediate and long-term benefits.
The Ability to Avoid Probate
Due to the cost and time-consuming nature of probate, the ability to avoid the process entirely is one of a revocable living trust's biggest benefits. This can be especially advantageous if you own real estate in more than one state, and your loved ones are able to avoid multiple probate proceedings.
Your Property Is Always Available to You
Revocable trusts are one of the best ways to ensure your property remains available for use during your lifetime or as needed should you become incapacitated or incapable of making decisions for yourself.
If you become disabled and do not have a trust, an expensive, lengthy, and potentially embarrassing court proceeding is generally required to appoint a conservator before your property can be used to benefit yourself or your family.
When you pass away, the assets in your revocable living trust are immediately available to pay estate taxes, administration expenses, and any outstanding debts without waiting for a probate decree or preliminary letters. If the trust is funded prior to your passing, the property in the trust remains in the trustee's name before and after your passing, and is immediately available for liquidation should it become necessary.
Contact Our California Estate Planning Team Today
Planning for the future is important. We understand that ensuring your loved ones are cared for is a top priority, and we are prepared to put our experience to work for you.
If you would like to learn more about how we can help you get started on your estate plan, don't hesitate to contact us today through our website or give us a call at (661) 426-2499 to schedule a consultation!