Estate planning is an important step in preparing for your family’s financial future. There are many estate planning options to consider, and each option provides distinct advantages. Many clients benefit from the flexibility offered by revocable living trusts. Like other trusts, a revocable trust can give you security while allowing you to provide for your family’s future. As with all estate planning measures, revocable trusts are enforceable legal instruments. As such, it is important to consult with an estate planning lawyer, like an estate lawyer in Sacramento, CA, in order to maximize the benefits of this type of trust.
Creating Your Revocable Trust
A revocable trust is a type of living trust; that is, a trust you create during your lifetime. Unlike a will, which only takes effect after your death, a living trust can take effect immediately after creation. There are different types of living trusts, including revocable trusts. A revocable trust is one that can be altered during your lifetime. The ability to change a revocable trust with comparable ease is a great advantage.
The first step in creating your revocable trust is thinking about how your estate should be distributed upon your death. The overall purpose of a trust is to dictate what assets should go to which beneficiaries. Spending time planning your trust is a crucial step. After you have decided on your beneficiaries, and what assets to move into trust, your lawyer can draft the trust documents.
Managing Trust Assets
There are three parties essential to every revocable trust: the grantor, the trustee, and the beneficiary (or beneficiaries). As the creator of the trust, you are the grantor. The trustee is the party responsible for managing the trust’s assets, both during your life and after your death. The beneficiary is the recipient of the trust assets as defined by the trust documents.
You can serve as the trustee for a revocable living trust. This means that you can manage the assets in the trust as you see fit. If you choose to act as trustee, you should appoint a successor trustee who can manage the trust if you become incapacitated.
Alternatively, you can appoint another to serve as trustee. If you choose to appoint someone else as trustee, that person will have a legal obligation to act in the best interests of your beneficiary. This means that your trustee cannot abuse trust assets solely for your own benefit. Whether managing your own revocable trust is advantageous depends on many factors. Your estate planning lawyer can help you make this decision and ensure that your trust will serve its intended purpose.
Thanks to our friends and contributors from Yee Law Group for their insight into estate planning.