The Living (Revocable) Trust

There are material benefits to establishing a living trust, or as I like to call them, revocable trusts. These trusts are much like wills, but more powerful.  While a will only concerns your affairs after you die, a revocable trust is created during your lifetime. It allows you to make changes and provides peace of mind. You also will have more control of when and to whom your assets should be distributed when you pass away.

Since the revocable trust is effective during your lifetime, it is particularly beneficial should you become incapacitated and unable to handle your own affairs. In the instance where you are unable to handle your own affairs, a revocable trust appoints an individual or corporate trustee who will act on your or your beneficiaries’ behalf. Without the revocable trust, a family member or other interested party might have to file a petition in probate court, asking a judge to appoint a conservator. The judge will have to weigh the medical issues, as well as, deal with family members who disagree on the appointment of the conservator. This can be an expensive process and may not be consistent with your wishes or the wishes of your family.

The revocable trust can also eliminate or significantly reduce the expense of probate, which involves a public court process, of handling your affairs.  The trust addresses important issues, such as, paying your funeral expenses and debts, as well as, the distribution of your assets  . The process would also involve the distribution of your assets to your heirs. This is often a long process before any assets are distributed. Once again, the process could also be quite expensive.

The matter can be further complicated if you own real estate, especially, outside of Massachusetts. In addition to the revocable trust, non-probate assets, such as, joint accounts, retirement plans, life insurance policies and jointly owned real estate would pass directly to the beneficiary or joint owner without the need for probate.  Probate avoidance also provides the privacy many clients desire.

If you have minor children, the revocable trust would provide a distribution mechanism of your assets to your children. You do not want to relinquish control of your assets prior to your children achieving an age greater than 18, such as, 25 or 30. These are ages where most young adults have advanced their maturity to use prudence in their financial decisions. These trusts typically allow for discretionary items, such as, health, education and other needs the children or guardian might encounter.

There are many possibilities, too many for our discussion here. The revocable trust cannot provide tax protection nor can it protect the elderly from MassHealth estate recovery.  Additionally, I do not recommend making a choice of a trust or will.  They are complementary and necessary for most planning purposes, as well as other financial and health care documents.  For this and many other reasons, the revocable or any other trust cannot be left to a do it yourself website. There are many complexities and the involvement of an experienced attorney specializing in estate planning and trusts is essential. Please feel free to direct any questions to the comment section or  contact us today for a free consultation.

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One comment on “The Living (Revocable) Trust

  1. […] am often asked to prepare a single document. A will, a living will, a healthcare proxy or a revocable trust. Most often, clients are trying to save money. While, individually, each of these documents are […]

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