As part of planning your estate, you draft a will for yourself and your beneficiaries. Could you do more to protect your interests and provide for your loved ones?
The American Bar Association explains how revocable living trusts work. Educate yourself on how to make the most of all estate planning documents at your disposal.
Reasons to use a revocable living trust
With a living trust, you protect and manage your assets in case you become disabled or ill or succumb to the effects of aging. You may change or revoke your trust whenever you desire. Revocable living trusts do not help you avoid estate tax. Because you may change your trust’s contents means you always include trust assets in your estate. A living trust lets you avoid probate, but you may not need to.
Understanding the difference between a revocable and irrevocable living trust
The existence of a “revocable” living trust indicates the existence of an “irrevocable” living trust. You cannot change or annul an irrevocable trust. Parties use the document to safeguard assets and for taxes.
The “living” aspect of a living trust
Revocable living trusts remain in place during your lifetime. You assign a trustee to manage property placed in the trust according to your desires. You may name yourself as the trustee and someone else to act as co-trustee. When you die, your trustee either manages and holds the trust’s contents for your beneficiaries or distributes trust assets to beneficiaries.
You may have more estate planning options than you realize. Using a revocable living trust may give you one less thing to worry about as you age.