I’ve talked about probate avoidance in my last two blogs. Among other things, I mentioned that I thought a revocable living trust was the best probate avoidance tool. In truth, there are a number of other important a valuable roles the living trust plays in good estate planning. A revocable living trust is a versatile tool that functions during your life, during the administration of your affairs at your death, and can also provide continuing trusts for your loved ones in the years after your death. In addition, the longer I practice estate planning, the more convinced I have become that the revocable living trust is the most important management tool in the event of your incapacity.
Many people do not realize that trusts aren’t only for the wealthy. A revocable living trust is an important tool for middle class people to keep their assets safe and pass wealth quickly on to loved ones after their death. The estate planning lawyers at Clarity Legal Group® can provide help in determining if you should establish a revocable living trust and ensure that once implemented it is organized and funded fully and correctly in order to accomplish your goals and protect your interests. With this kind of trust, you are you own trustee until you can no longer serve. A good trust will give the people you choose as your successor trustees both the appropriate control and thoughtful guidance to carry out your wishes in the event of your incapacity and at your death.
What is a Revocable Living Trust?
A revocable living trust is a trust that you create but retain the power to change or modify as long as you are alive and competent. This kind of trust requires no separate accounting or tax reporting during your life. A revocable living trust is distinct from an irrevocable trust, which is a trust that requires you to give up substantial control over the assets held within it.
You can make a revocable living trust by working with a living trust lawyer at Clarity Legal Group® to create a legally valid trust document that is defined specifically to accomplish your goals. The living trust becomes irrevocable at your death — meaning no one can change your wishes after you die. The person you have chosen as your successor trustee will carry out the instructions you and your attorney have documented together in creating the trust. As I noted in earlier blogs, one of the big advantages is that the administration of your trust assets at death happens outside of the court process known as probate.
A good trust is flexible and also accounts for the kinds of contingencies which might undermine your goals if not addressed.
One of the benefits of a revocable living trust is that it helps you be prepared for incapacity. With a living trust, should you become incapacitated, the person who you have named as the backup trustee can promptly take over management of trust assets. There will be no need for your loved ones to go to court and get a guardian appointed to manage your money and property that is held within the trust. In addition, the living trust will be a lot easier to use than a power of attorney for managing bank and other financial accounts in the event of your incapacity. I’ll be talking about this more in a future blog.
When you have made your revocable living trust, you can specify who should inherit the trust assets after you pass on. These assets will quickly comparatively easily through the trust administration process so the new owners can take control over them. This is important if you want to ensure that your wealth moves to a new owner in a timely manner because your loved ones will depend upon the inheritance or because the assets need careful management.
You will also need to fund the trust once it has been created. At Clarity Legal Group® we have seen a lot of people who worked with a lawyer to set up a trust, but did not get their assets transferred to the trust. The typical approach of even the best trust lawyers has for many years been to create the trust and then give the client a letter or memo of instructions leaving it to the client to restructure their assets to complete the estate plan. If the client gets frustrated or runs into a bank employee who tells them they can’t do what they are trying to do, or is just too busy to follow up, the funding never gets done. This means the estate planning was not completed — and the lawyer and client may not even know it.
At Clarity Legal Group® we have taken a different approach. We not only advise our clients with respect to funding their trust, but we also work directly with their financial advisors and institutions to make sure financial accounts are correctly titled and beneficiary designations are properly established. Our Client Asset Organization Manager actually secures financial account forms, prepares them in our office, confirms their accuracy with the financial institution as appropriate and then reviews the forms with you and supervises your signing of the forms. Leaving nothing to chance, we prepare letters for your signature and then mail the signed documentation to the financial institutions. This is a lot of work but it is the difference between getting it right and maybe getting it mostly right.
Getting Help from a Revocable Living Trust Lawyer
A revocable living trust lawyer can provide you with personalized help creating a legally valid trust document and can assist you with the process of creating a trust that gives you the control over your wealth that you desire.
Whether you are concerned about who will manage your wealth in case of incapacity or you are worried about the quick and private transfer of assets after your death, a revocable living trust can provide the answer that you are looking for. To learn more, give the estate planning lawyers of Clarity Legal Group® a call at 919-484-0012 or contact us online today.