Free Revocable Living Trust Forms

Is a Revocable Living Trust Right For Me?

A living trust is one made by an individual while he or she is alive. Also known as a revocable living trust, it is basically created to hold ownership of an individual’s assets and property. The property or assets involved are distributed after the individual’s death.

Understanding the Terms

The individual who is creating the trust is known as the grantor. The person or persons who survive the will and are eligible for claiming those assets are known as the trustee(s). The trustee is to follow the terms of the trust after the grantor’s death. While the grantor is alive, he or she may also serve as the trustee of the will and control and claim various assets or property even though they actually belong to the trust.

When working with revocable living trusts, another term frequently used in this context is the successor trustee. The successor trustee is the person who will manage the assets of the trust once the grantor dies. The successor trustee is given the same powers the grantor had when he or she was alive. He or she does not have the legal right to change the trust.

What Happens Next

On the death of the grantor, the trust becomes irrevocable. Any decisions regarding the assets must be made for the remaining beneficiaries. The successor trustee is also responsible for the debts, expenses and taxes of the written trust document. This amount must then be distributed to the trust beneficiaries. Often a trust which is made for termination after the grantors death is a way of avoiding probate. Generally the death beneficiary should be named Successor Trustee.

Do Revocable Living Trusts Really Help Avoid Probate?

The biggest advantage and reason for making a living trust is to avoid probate. The living trust does not have to go through probate. However, if you have a will and no living trust, then the assets of the will must go through probate. There are various other types of estate planning options which help the individual to avoid probate including a joint tenancy, life insurance policy, in-trust-for bank account, individual retirement, pension, but there are many benefits to a revocable living trust.

Everybody is interested in saving money in one-way or the other, and concern about probate lawyer fees can be eliminated with the help of a living trust. Though living trusts do not save money for you when you are alive, they do rule out the various aspects of probate and the associated fees. Since those probate fees tend to include inventory expenses, upgrading the assets and property, as well as paying the various debts and taxes, it’s only a benefit to you and your heirs to get rid of them. In addition to dumping some of the associated fees, a living trust also helps in the distribution of the assets and property according to the will.

Along with this, the living trust allows the person or the grantor to be a commanding authority source while he or she is alive. The living trust helps the grantor to remain in control of his or her property and assets. And after the death of the grantor, the beneficiaries, successful trustees or surviving family members can transfer these assets and property with ease and convenience without probate. The money which is saved in the probate expenses goes to the people who will eventually inherit the trust.

While avoiding probate is a huge plus, there are not many income tax advantages when it comes to living trusts. The living trust involves the process of the grantor being the owner of the trust. As the owner of the trust, the grantor must report or reveal the related assets, property and trust income under his or her personal return. There are various income tax rules and regulations for trusts which have to be followed.

Why Not Write A Will?

There are plenty of reasons that a living trust works out better than a will might. The living trust is made and executed while the person is alive. The will is executed after the death of the grantor. Also, the will becomes a public record during the probate process; copies of the will can be obtained by anyone simply by filling out the right forms. However a living trust is a private matter not subject to public scrutiny and is a more private document.

Considering talking with an estate planning attorney if you have further questions about how the benefits of a revocable living trust may help your unique situation.