Park LaBrea News/Beverly Press, By Stephen Kramer Esq.
A revocable trust (sometimes referred to as a “living trust”) allows you to control the disposition of your assets long after your death, as well as preventing the court from controlling your assets in the event of your incapacity. Even with a revocable trust, however, a will (often referred to as a “pour over” will) should be executed in order to be certain that any assets not in your trust at the time of your death will be distributed in accordance with your wishes as expressed in your revocable rust.
A revocable trust is a written agreement between the person creating the trust and the person creating the trust and the person named to manage the assets of the trust (typically yourself during your lifetime). The revocable trust will also name the person and/or financial institution who would handle your assets in the event of your disability and their distribution in the event of your death.
A revocable trust may be amended or revoked by you at any time during your life, as long as you are competent. The terms of your trust become irrevocable (not subject to change) after your death. Because a revocable trust contains provisions which direct the distribution of your assets on or after your death, the trust acts as a “will substitute”.
In so acting as a “will substitute”, the use of a revocable trust can, if implemented properly, eliminate the need for the probate of your assets held in the name of your trust, thus avoiding additional legal and probate fees and perhaps, unnecessary delays in the administration and distribution of your estate.
As you can see, trusts are not just for the wealthy. Anyone desiring to control when or how their assets are distributed following their death, should consider a revocable trust. In summary, a revocable trust can do the following:
- Avoid probate at death
- Prevent court control of assets at incapacity
- Provide privacy (since a revocable trust is not a public document)
- Allow quick distribution of assets or control the distribution of assets following your death
- Prevent unintentional disinheritance that can occur through intestate succession
- Reduce or eliminate estate taxes