A Simple Guide to Revocable Living Trusts in Estate Planning
Estate planning is a significant endeavor that allows you to arrange what would happen to your assets and valuables upon your passing. There are many avenues for you to entrust your belongings to your loved ones in an estate plan, and it’s best to explore each one with a knowledgeable legal professional.
A revocable living trust is often recommended due to the flexibility and privacy that it provides. Continue reading to know more about this option for your estate plan.
Defining a Revocable Trust
A revocable living trust is understood as a legal document created to protect your family and belongings. It includes a trust agreement and a separate declaration of trust. The trust agreement is the actual revocable trust, and the declaration of trust is an official declaration of ownership of the primary assets.
In short, a revocable living trust is a contractual agreement between two people: a settler, or the person who makes the trust, and a trustee, or the person to whom the property is given. There’s also the executor, usually a legal professional, who’s responsible for carrying out the terms that were laid out by the settler.
Making a Revocable Trust
To make a revocable living trust, you must have a deed of trust, which contains the basic structure of the revocable living trust. Next, you must create a declaration of trust that specifies the contents of the trust, and the assets that will be transferred to the trust.
What’s so great about a revocable living trust is that it gives a person the opportunity to shift the terms of the trust whenever they wish. As long as the revocable living trust is signed and witnessed, it can be changed through a deed of the amendment.
Transferring Money to a Revocable Trust
The final step in making a revocable living trust is transferring your assets to it. This can be done through a simple and relatively inexpensive process. To do this, you must create a declaration of trust, sign it, and have it acknowledged by a notary.
Personal assets, like your cars, houses, and bank accounts, as well as your business assets, like stocks, bonds, equipment, and real estate, can be transferred. Money can also be given to the trust, and you can transfer ownership of these assets as well.
Avoiding Probate with a Revocable Trust
The main differentiator of a revocable trust in comparison to other estate planning is how you’re able to avoid probate. If you didn’t know, probate gives people the opportunity to contest your will or any other transfer of assets upon your passing.
The probate process can be pretty time-consuming and expensive. In many cases, probate can be avoided with a revocable living trust. In addition, as a revocable living trust is private, others will not find out what assets you’ve given to your loved ones.
After reading this, you’d hopefully have a better idea of what a revocable living trust is and the benefits it provides. It’s a great option for estate planning that allows you to give your family and belongings to the people you love without the hassle of probate.
In need of a trust attorney in Colorado? Estate Planning Lawyers Colorado attorney Marc Carlson can attend to your estate planning needs, whether it involves wills, trusts, probate, and legacy planning. Get in touch with us today!