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Revocable Trust, Also Known As A Living Trust |
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The revocable trust (also known as a living trust) is a lifetime trust which you (the grantor) create for your own benefit. You, as grantor, retain the power to amend and revoke your trust at any time. You may serve as the sole trustee or you may appoint other persons (such as your spouse, children, or a trust company) to serve along with you. Couples with modest estates which are not subject to the estate tax system may use a joint revocable trust.
You may prefer the privacy and potentially greater efficiency of settling your estate through a revocable trust without having to have your family use the probate court system . If you want to accomplish that objective, you must carefully inventory your property and sign one or more deeds, beneficiary designations, or other titling documents through which your revocable trust will either own your estate while you are living or be entitled to collect it when you die. If you effectively complete your titling work, your family will avoid probate.
A revocable trust is an especially effective tool if you own one or more parcels of real estate located in other states. In the absence of a revocable trust, real estate located in other states may require your family to initiate probate proceedings in several states in order to settle your estate.
Revocable trusts may be used to carry out the same estate tax planning and other dispositive objectives as a will. Such trusts often include marital trusts, family trusts, and trusts for children, including special trusts for disabled individuals. Since the trust is amendable, you can change your dispositive plan as your family circumstances change.
A revocable trust is an effective vehicle for incapacity protection. You may appoint one or more successor trustees who will serve in the event that you should become incapacitated. Such a plan may permit your family to avoid costly and public guardianship or conservatorship court proceedings.
While revocable trusts have many advantages as described above, there are certain things a revocable trust cannot do. A revocable trust is not an effective means to avoid the claims of your creditors. Also, it is not an effective means for you to dispose of your property in order to qualify for medical assistance.
This article is intended to acquaint the reader with some general principles which govern revocable trusts and is not intended to convey legal advice with respect to the reader’s specific circumstances. Specific planning opportunities which employ revocable trusts require detailed legal analysis and drafting techniques and the reader is therefore encouraged to call one of the following attorneys who practice in the Trusts and Estates group at Quinlivan & Hughes, P.A. 320-251-1414.
Kevin A. Spellacy
John H. Wenker
Robert P. Cunningham
W. Benjamin Winger
Bradley W. Hanson
See: Probate Overview
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