If you would like to know about revocable living trusts and other estate planning tools, talk to a trust lawyer. They assist individuals and families who wish to create a failsafe method for preserving their legacy and taking care of their heirs. A revocable living trust can also assist the trust maker should they become physically or mentally incapacitated in that it can be a source of protected assets. There are many advantages to creating a revocable living trust and a trust lawyer can review these with you. If you determine that a revocable living trust is not ideal for your particular circumstances, other choices are available. Many clients take advantage of the benefits of a revocable living trust as well as the benefits provided by a will to create a hybrid estate planning solution. Whatever your estate needs are, a trust lawyer can assist you.
What happens to my revocable living trust should I become mentally or physically incapacitated?
A contingency that your trust lawyer will take into consideration is this possibility. As a result, your trust directive will specify what should happen if you become incapacitated to the extent that you cannot manage your affairs or the trust. Most people choose to name a trusted and responsible person as the successor trustee. The successor trustee will take over the management of your trust if you are found mentally or physically incompetent. Your designated successor trustee can then manage and liquidate the assets as necessary such as to pay for your healthcare and cost of living expenses.
What happens to my revocable living trust after my death?
Even a revocable living trust becomes irrevocable after the trust maker dies. This is for the simple and obvious fact that the deceased can no longer make changes to the trust, and so to protect their final wishes, no one can make changes to that trust. However, the trust’s successor trustee can access the trust’s assets in order to pay the deceased trust maker’s taxes, debts, and final bills. This process is similar to the scenario above when the trust maker became incapacitated. After the trustee completes the process of paying the bills, they then distribute the balance of the assets to the designated heirs. Once that process is completed they will terminate the trust.
With a revocable living trust, can my estate avoid estate taxes and probate?
Revocable living trusts share the same social security number as the trust maker. Because of this, assets within the trust are subject to estate taxes. Because the trust maker can retake ownership of the assets at any time, the Internal Revenue Service views these assets as permanently associated with the trust maker. (This is not the same for irrevocable living trusts because the trust maker cannot retake ownership of the assets they transferred into the trust.)
Insofar as probate is concerned, a probate court views the assets transferred into a revocable living trust as assets that are no longer owned by the trust maker. For this reason, those assets can avoid the probate process, a saving of time and court costs.
To learn more about revocable living trusts and if creating one is right for you, contact a trust lawyer in Danbury, CT to schedule a consultation.
Thanks to Sweeney Legal for their insight into estate planning and revocable living trusts.