What is a Revocable Living Trust?
A revocable living trust allows you to specify in writing how you want your assets distributed after your death. It also allows you to specify a person to manage portions of your estate while you are living and if you become unable to do this for yourself.
How a Revocable Living Trust Differs from a Will
- This is a private document that is not made public after your death (unlike a will).
- The estate will not go through probate after you pass away; a specific person, called a trustee, is designated in the trust to distribute your estate per your written instructions.
Other Benefits of a Revocable Living Trust
- The document can be altered at any time as long as you still have capacity. Beneficiaries can be changed or added, assets can be reallocated to different beneficiaries, etc.
- You still have access to and control of your property while you are alive and of sound mind.
Important Details to Know
- You still pay taxes on the income that you earn because you are still the owner of the assets.
- If you obtain any assets, those must be titled in the name of your revocable living trust; they are not automatically added.
- If you do not review your assets and ensure they are titled in the name of your revocable trust often, some of your important assets may be left out and become subject to probate.
- Your trust will have to be funded and you will need to work with your investments, banks, insurance companies to transfer your property to your revocable trust. Depending on your estate, there may be other assets that need to be funded into the trust and this could be time-consuming.
The cost of setting up a revocable living trust can be more expensive than a will, but it allows for a greater level of protection in the event you become incapacitated. It may also help shield your family from probate and estate taxes – things that are worth a little more up-front costs.
There are many different ways to protect your assets and provide for your family: wills, different types of irrevocable living trusts and revocable living trusts and more. The process can get confusing! Make sure you choose the right estate document for your unique situation.
Contact the Denver estate planning lawyers at The Brown Law Firm, LLC: (303) 339-3750. We can explain in depth the differences among the various options. You can also send us a message online to set up an appointment.