What Are Revocable Living Trusts For?
A Guide To Revocable Living Trusts In Beverly Hills, California
As we grow older, the more important it is to start managing our assets. Not only for your own good but also for the possible future beneficiaries. That said, managing your assets doesn't have to wait until you're too old to do so.
While you're alive, you can establish a revocable living trust to help you get things started. Here's a quick guide on what revocable living trusts are, how they're funded, and what happens to them when you die.
Types Of Trust
There are different types of trust, including:
Basic trust. Has three positions with different roles:
Grantor entrusts property to the trustee for the benefit of the beneficiary
Beneficiary is entitled to the property's benefits
Trustee receives property from the grantor and oversees its management for the benefit of the beneficiary
Testamentary trust. A trust established in a will.
How Does the Trust Get Funded?
A living trust functions while the grantor is still alive. In a revocable trust, the grantor (or owner of the assets) can amend the trust's provisions or terminate it at any time.
A legal document can be used to establish a living trust, which includes instructions on:
Who you wish to leave your assets to (subsequent beneficiaries)
Who will manage your assets
How they will be managed and distributed if you become unable to handle them (alternate trustees)
After you (the first trustee) pass away, the trust document will contain instructions on administering the property.
Each trust is required to handle specific property stated in the trust document.
After establishing a living trust, the next step is to transfer assets into the trust, such as bank accounts, real estate, and stocks. Because you are the original trustee, these assets stay in your control after the transfer.
For any confusion, consult with a Beverly Hills Estate Planning Lawyer in California to help you.
What Happens After You Die?
After you die, your co-trustee or successor trustee will execute your trust's instructions, distributing and managing your assets for the benefit of the named beneficiaries.
People and organizations—such as family members, friends, religious organizations, and educational institutions—can be beneficiaries of a living trust.
The assets in your living trust will be taxed at both the federal and state levels.
Remember that, depending on the amount of your estate, your attorney can include provisions in your living trust to help decrease or even eliminate taxes. If avoiding federal estate taxes is your foremost priority, you might wish to consider an irrevocable trust as an alternative.
Bottom-line
A revocable living trust can be a valuable estate planning tool for preserving control over your assets; while you're alive and after you pass away. In addition, a living trust can be used instead of a will to allow for significant life changes like marriage, divorce, and having children.
When your estate is finalized, a living trust can also assist you in reducing or eliminating probate and administrative costs.
In addition, an expert Beverly Hills Estate Planning Lawyer may decrease estate costs and avoid unnecessary federal and state taxes by establishing a living trust.
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