What Is a Revocable Living Trust?
Posted on September 23rd, 2019 by Oddo & Babat, P.C.
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If you are in the process of planning your estate, it is important for you to know what your options are. You may have heard that you can have a will or a trust for your estate. For the most part, it is true that these are your two options, but do you know why you might want one over the other? Most people have a good idea of what a will is and how it works, so this guide will go over what a trust is, what makes a living trust special, and what benefits a trust might have over a will.
What Is a Trust?
A trust is essentially an agreement with a trustee. When setting up a trust, you give a set of property to the trustee and decide what condition to place on the trust. When this condition is met, the trustee passes the possessions along to whoever is designated by the trust. Trusts can be set up for all sorts of reasons besides estate planning. For instance, you can set up a trust to gift a large amount of money to someone when he or she graduates college. For estate planning, the condition on the trust will likely be the death of the individual who sets up the trust, allowing his or her possessions to be passed on to loved ones.
Trusts offer these benefits over a will:
- Ability to put conditions on possessions
- Minimize or eliminate estate taxation
- Avoid the probate period
The main reason most people choose a trust over a will is to put conditions on certain possessions. For instance, you can decide that your grandson will receive $5,000 when you pass, but only if he is 18 years old at the time.
Revocable Living Trusts
Trusts can either be revocable or irrevocable. This refers to whether you can make changes to the trust or access the items in the trust. With a revocable living trust, you can still access anything you put in the trust, allowing you to continue living off your possessions. If you need to make any chances, a revocable trust can allow you to do this. Irrevocable trusts do not have this luxury. The main benefit of an irrevocable trust is that no one can access it no matter what. This is usually only beneficial when trying to prevent debtors or law enforcement from accessing your possessions. You can learn more about the in-depth aspects of trusts by speaking with a Folsom living trust lawyer.
Thanks to Yee Law Group for their insight into estate planning and a revocable living trust.
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