AARP agrees that utilizing a revocable living trust is the new thing! Revocable living trusts provide savings opportunities, save probate expenses, and provide other advantages over a will.
What is a revocable living trust?
It is a relationship established between three parties:
- The creator of the trust;
- The trustee who manages the property within the trust and distributes proceeds to beneficiaries; and
- The beneficiaries who receive the property according to the terms of the trust.
A revocable living trust allows assets within the trust as well as income generated by those assets to be managed and distributed by the trustee. The trust income and property are then distributed in accordance with the terms and conditions of the trust. This type of trust is referred to as a living trust because it is established during the life of the creator.
How does one benefit from a revocable living trust?
A revocable living trust provides numerous benefits to the creator. If the creator becomes incapacitated, the trustee is typically authorized to manage all of the assets within the trust as well as any obligations in accordance with the terms of the trust without court intervention. A revocable living trust will also provide financial assistance to family members if the creator becomes incapacitated. Upon the death of the creator, the trust transfers assets outside of the estate and outside of probating a Will. A living revocable trust can also be structured to minimize federal or state tax consequences. A revocable living trust also allows the creator to act as trustee, either with their spouse or without their spouse, or even revoke or modify the trust prior to death.
How does a revocable living trust compare to a will?
Both a revocable living trust and a will are tools that provide a method of passing property and other assets to family members and loved ones. However, a revocable living trust avoids the probate process, whereas a will does not. Unlike a will, a revocable living trust does not need to be administered by a probate court. By avoiding probate, an estate can essentially save numerous costs and assets will be distributed faster to family members and loved ones. In addition, a revocable living trust protects the privacy of the decedent as well as their finances. While court documents and the probate process are a matter of public record, a revocable living trust is handled outside of probate and is therefore kept private.
The attorneys at Hobson-Williams, P.C. are skilled in all aspects of elder law and are dedicated to representing clients with diligence and compassion during emotional times. Contact the experienced New York elder law attorneys at Hobson-Williams, P.C. for a consultation by calling them at 866-825-1LAW or vising them at www.thobsonwilliamslaw.com.