Benefits of the Revocable Living Trust for Your Estate Planning
There are many benefits to a Revocable Living Trust, but often people think that only the wealthy need a Trust for their estate planning. The truth is, there is no magic net worth number that tells us when a trust provides the best planning for your assets. The two key factors that tell us a trust may be the best option are the family situation and what type of property you own. I like to tell clients that if I know the what we are planning for (your assets) and the who we are planning for (your beneficiaries) I can usually tell you fairly quickly if a Revocable Living Trust is the best option for your estate planning.
There are many advantages to the Revocable Living Trust, but here are a few to consider:
The Revocable Living Trust Appoints Someone to Care for Your Finances When You are Not Able
Both a Will and a Revocable Living Trust contain instructions for distributing your assets after you die. However, a Revocable Living Trust also contains your instructions for managing your assets and your care should you become incapacitated. The Trust names the trustee you selected and permits that person to step into your shoes to pay your bills, preserve your assets, liquidate properties, if needed, and generally assure that both you and your finances are being cared for.
The Trust makes it easy for someone to step in and take charge to assist you with maintaining your financial affairs.
A Revocable Living Trust Avoids Probate, Maintains Some of Your Privacy and Reduces the Cost of Wrapping Up Your Estate at Death
As I mentioned earlier, a Will says who will receive the assets in your estate after your death. However, the Will does not transfer the assets automatically. Instead, the person you appointed to wrap up your estate (your personal representative or
executor) must submit the Will, an application to be appointed as executor, along with other paperwork, to the probate court. That is how we probate your estate. If all you have is a Will, your estate will have to go through the probate court. A properly prepared and funded Revocable Living Trust, on the other hand, will avoid the need for a probate court proceeding on your death. It also avoids the possibility of disclosure of your assets to the public – the probate court filings are public record. With a Trust, the person you selected to take charge of your estate will be able to step in quickly to gather, sell and distribute your assets to your beneficiaries with no need for a court’s involvement.
Avoiding probate is usually a good idea. One example of why: If you have specifically omitted one of your “heirs” from your plan, the probate court still requires us to send them notice that we filed a probate – even though they are supposed to get nothing. As you can imagine, this often leads to that person filing a contest or claim in the probate proceeding. Note: Who are your heirs? If you have children, it is them. If you don’t, then your parents are your heirs, then your siblings and then nieces and nephews.
How the Trust Works
When you set up a Trust, you transfer assets from yourself to the trust. The deed to your home, for instance, will transfer from You to You as Trustee of your trust. You still control the assets, but your role is as trustee (and beneficiary). For a married couple, it won’t feel much different than when you hold your assets in joint tenancy. You also maintain full control of your assets, doing the same things with them you did before: write checks, buy and sell, direct your stockbroker. Even your income tax returns stay the same. The IRS ignores the trust.
Transferring Assets to the Trust
In my office, we transfer all of the Arizona real estate into your trust. That part is easy for you! We will also assist your financial planner with retitling assets if you give us permission to speak directly to him or her. We interface with out of state attorneys for any property you own elsewhere. Last, we give you a short certification of the Trust to take to your bank or use in other situations to put bank accounts and other property in the trust. It isn’t difficult to transfer assets to the Trust, and once you understand how it works, you don’t have to turn to our office
for help unless you want our assistance.
The Revocable Living Trust makes sense for many estates. To find out if it makes sense for you, take advantage of my free initial consultation for estate planning. Give our office a call at 602-375-6752 or go to our website at https://libbybanks.com/schedule-estate-planning-meeting to book an appointment online.