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What Is a Revocable Living Trust?

On Behalf of | Apr 17, 2018 | Estate Planning |

Revocable Living Trust — Last Will and Testament in Los Angeles, CA
In the process of estate planning, many people think that a will is all they need. But they could not be further from the truth. Depending on the assets you own and the potential medical complications you face in the future, you may need something much more specific. This is where a revocable trust comes in.

Why Not Rely on a Last Will and Testament?

For many reasons, lawyers often advise that you do not rely solely on a will to ensure that your needs and desires are met. First of all, wills force the estate to go through probate, which is an enduring court process. When you have a revocable living trust, your loved ones are not required to go through the court following an already difficult event or trauma.

Who Is Involved in a Revocable Trust?

When you have a revocable trust, several people are involved. The first person is the grantor, also known as the creator of the trust.

The trustee is responsible for distributing and managing assets according to the documents that are part of the trust. This person must be deemed mentally competent and able to manage the benefits. The trustee could be yourself or a spouse, but some people have co-trustees and successors who will also handle it. These people could include a child, a lawyer, a bank, or other trusted individual.

The trust beneficiaries are the individuals who receive the benefits of the trust. They are typically family members, like children or grandchildren.

When Should You Consider a Trust?

You might consider starting a revocable trust early on, before you face any potential injury or serious illness. Early planning is made easy with the help of legal services.

One of the biggest reasons to consider a living trust is in the event that you become mentally incapacitated. Instead of all your assets being distributed to beneficiaries, your trustee will manage your assets in your best interests.

Why Do You Still Need a Will?

You likely still need a will in the event that you opt for a revocable trust. In the event that you are unable to transfer all your properties and assets into the trust before something happens, your will ensures that these are taken care of. While specific assets will still go into probate, the process is handled more smoothly than if you had no will at all.

What Are the Benefits of a Revocable Trust?

Having a revocable trust comes with a number of benefits. While not a comprehensive list of benefits, these reasons to consider a trust will get you started.

As you already know, having a trust allows your assets to pass over probate court in the event that something happens to you. Additionally, your beneficiaries have immediate access to cash and other assets when you use a trust.

You can also change your trust at your own discretion. If you want to remove or add beneficiaries and assets, you have the right to do so.

A revocable trust allows you to preserve your privacy. Probate can be a highly public process, and keeping a trust allows for more discretion.

With a trust, you also have the option of disinheriting people who challenge your decision in court. You can also segregate assets, which comes in handy if you are married and want to differentiate properties.

What Are the Disadvantages of a Revocable Trust?

Of course, not everything about a trust is entirely positive. The process of establishing a trust can be expensive, and you may face higher administrative expenses if you go this route.

Are you looking for answers to your questions about trusts and estate planning? SW Smyth LLP is here to answer your questions. Call our office today at 323-486-0731 to set up an appointment to begin estate planning today.