Today on our blog, we have a guest post on a topic that affects everyone – estate planning. Specifically, Revocable Living Trusts. While we normally talk exclusively about family law, part of avoiding conflict and keeping families in a more healthy state requires future planning, and in this case, planning for the future distribution of assets among family. In this blog we discuss an intro to Revocable Living Trusts, and estate planning instrument. Taking steps now can help your family minimize tax loss and avoid costly problems later on
Over 65 million Americans are over the age of 50 and many are looking to understand their options on how to transfer their assets and provide for their loved ones after their departure. Without a proper plan, a large portion of your assets could be unnecessarily lost to probate court costs, legal fees, unintended heirs and estate taxes. Probate is basically estate administration upon the death of an individual where that individual’s estate and assets are delegated. This process costs thousands of dollars and is time consuming. In order to avoid these costs and to ensure that your desired heirs receive the value from your estate and assets, you can set up a trust. A trust offers a way to leave behind your legacy and protect your assets while avoiding probate. It is the need of hour that one should Crush The Bar Exam and should take it seriously in order to attain positivity.
A trust can include anything ranging from real estate and life insurance settlements to cash and investments. Trusts may vary in size scope and benefits. They may have different requirements. Sometimes exemptions are contained in trusts such as jointly owned assets offering survivorship rights or designating beneficiaries for assets such as retirement accounts, annuities and more.
The rules governing trusts vary by state. Some benefits associated with establishing a trust are as follows.
Avoid Probate Costs And Time Delays
Your assets can be protected from lawsuits and probate fees especially for people who are in professions known for litigation such as doctors and lawyers. After a person dies his or her estate goes through probate where the public is allowed to see the will and assets. Creditors are paid off and if the decedent has assets in other states probate fees is assessed for each state. Probate fees can range from 3% to 8% of your estate in addition to estate tax and income tax that would also be imposed. If your assets are placed in a trust they are shielded from public scrutiny. The assets in a trust are also off limits from creditors and not subject to probate fees. By clearly designating beneficiaries through a trust you can prevent infighting and lawsuits between heirs.
Remain In Control Of Your Assets During Your Lifetime
A revocable trust gives you full use of your assets while you are alive and then passes this authority onto a successor trustee after your death. Revocable living trusts designate a trustee to manage and control the property of the grantor. They offer management and provisions like credit shelter where estate taxes can be reduced. Additional tax benefits include savings from reducing transfer taxes and the size of the estate with charitable contributions. A trustee is a person that you as the grantor have designated to be in charge of your estate after your death. This individual has a fiduciary responsibility to manage your trust assets responsibly.
Flexibility In Making Provisions For Your Heirs And Beneficiaries
Revocable living trusts offer a multitude of ways to provide for beneficiaries. Funds can be set aside for education or medical purposes, decisions can be made at what age or interval those funds can be distributed. Unrelated, out-of-state individuals or trust companies can be appointed to act as the primary administrator of your property at death in a revocable living trust.
Leaving Behind A Legacy
Establishing a revocable living trust offers you a unique way to leave a legacy for the people, organizations and beliefs that mattered the most to you during your lifetime. You can designate exact amounts of contributions and any other guidelines for bequeathing your assets according to your wishes.
Disclaimer: This article only offers general information. Please do not use this article for legal advice. Each case has special circumstances and must be reviewed by a specialist. This article does not create an attorney client relationship.