A revocable living trust is an estate planning tool that allows an individual to determine how their estate is divided and who it is divided to upon their death. The revocable living trust is a legal document that allows the trust maker to transfer their assets into the trust in order to distribute the proceeds to their designated beneficiary. The trust is formed while the trust maker is still alive and the terms of the trust are established in writing.
The trust details what happens to the trust property and assets during the trust maker’s life as well as what occurs upon their death. The unique part of a revocable living trust is that it can be changed and amended as the trust maker sees fit prior to their death.
Once the revocable living trust is established, the trust maker acts as the trustee, or the individual who administers the trust, while they are still alive.
When the trust is formed, a person is designated to act as the trustee upon the death of the trust maker. The trustee is responsible for all aspects of administering the trust and ensuring that the assets are distributed to the beneficiary according to the trust maker’s wishes.
The main benefit of establishing a revocable living trust is that it protects an individual’s property and assets from probate proceedings upon their death. Any property or assets that are held in the living trust are passed directly to the trust maker’s beneficiaries upon their death. In order for this to occur, the ownership and title of all assets and property must be transferred into the trust while the trust maker is still alive. Any asset acquisitions that occur while the trust is active must be placed into the trust in order for protection from probate to occur.
The revocable living trust is an ideal way for an individual to maintain complete control over how their assets are distributed. The trust can be set up to distribute assets to the beneficiary while the trust maker is still alive, and upon their death, the assets continue to transfer seamlessly. Trusts are particularly beneficial to individuals who own property and assets in different states because each state would require its own probate proceedings, which would be very costly. The revocable living trust is also easier for a trustee to administer because it does not require the filing of any specific documents or reports with the court.
A revocable living trust is an ideal estate planning solution for individuals who have substantial assets and property holdings that they wish to pass along to their beneficiaries without interference from the courts. This, however, is also the main disadvantage to a living trust because it gives a great deal of authority to the actual trustee because their actions are not supervised by the court.
Errors in the administration of the trust are not subject to review by the court, therefore any discrepancies in how the trust is administered can create issues between the trustee and the beneficiary. As the role of trustee is such a vital aspect to the administration of the trust, many individuals utilize a professional service or legal firm to act as trustee to administer their estate.
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