Are you one of the good souls that leave behind a good inheritance for their loved ones when it is time to leave? And, are you worried about how it is all going to be put to use? It is not always that monies and properties are used diligently by those who get their hands on them by inheritance. Some heirs spend it all off as if there is no tomorrow. You can still choose to manage the properties long after you are dead.
A Revocable Living Trust enables you do just that. A RLT in many ways is a substitute for a will and court supervision is not required.
In the RLT, a grantor (the one who establishes the trust) does not wait for his death but starts transferring property ownership into a trust at some point of his life and continue with the procedure whenever needed. A trustee manages the transferred properties according to the clauses in the trust documents. Most common trusts are QTIP trusts, living trusts, charitable remainder trusts, generation-skipping trusts, credit shelter trusts, irrevocable life insurance trusts and incentive trusts.
Establishment of RLT
A will comes into effect after one dies but RLT does so even when one is alive. Since the trust is revocable, a grantor can choose to make changes whenever he feels such changes are in order. A written agreement appoints someone as trustee who administers the property. While any competent adult can be appointed as a trustee, you can always choose a trust company or a bank to do the job.
Absence of Probate
Probate usually costs good money and entails multiple proceedings if the properties you own are spread over many states. In case there is a will, because of the absence of court proceedings, the assets in an RLT take precedence over the ones in the will thereby saving a lot of money.
As mentioned before, you can make changes in an RLT at your will while still alive.
Your privacy is protected because there is no probate which may reveal your assets and their worth to the public.
Disinheritance as Option
You can choose who exactly will inherit your property in an RLT situation. A will may give rise to disputes that lead to court cases. This may defeat your very purposes. In a trust, however, you can disinherit anyone and he would have no say in the matter.
Segregation of Assets
Two people might already be in possession of properties of their own at the time of their marriage. The trust can segregate them all and deal with them separately from the community property assets.
Power of Attorney
Someone appointed a guardian to your minor children might spend unnecessarily or wantonly but the trust can control him by using the by-laws in it. In case you are so ill and incapacitated that you cannot make decisions on your own, a previously authorized person can take over from you and make decisions regarding your medications and medical procedures.
Whitney McGuire is a legal reputation management consultant with a law firm. She also likes to blog about her legal practises for helping beginners and networking with fellow industry people on her blog sphere.
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