A revocable living trust is an important estate planning tool that enables an individual (hereafter called the grantor) to safeguard their assets throughout their lifetime. The purpose of establishing a living trust is to provide the grantor with a legal framework to manage their financial resources and assets. This includes safeguarding their property, bank accounts, and personal possessions during their lifetime.
As the name suggests, a revocable living trust allows the grantor to revoke it or make adjustments to it while they are alive. Revocable living trusts in California eliminate the need for a drawn-out probate procedure. The trustee named in the trust will distribute the grantor’s assets to their designated heirs upon their death.
What are some benefits of having a revocable living trust?
Living trusts are useful in estate planning because they enable people to manage their assets and transfer them according to their intentions after death or incapacitation. Some additional benefits include:
- Privacy. Unlike wills, which become public after probate, the terms and distribution of assets held under a living trust remain private.
- Manages assets. The trustee has the authority to administer the grantor’s assets in the event of the grantor’s incapacity.
- Decreases taxes. An individual’s taxable estate may be less in the long term if they establish a living trust.
You should select a trustee who possesses the necessary skills to manage the trust’s funds, monitor investments and ensure your beneficiaries are provided for. Such an individual can be your spouse, your adult child, a trusted friend or a financial institution. In the event that your trustee cannot perform their duties due to illness or other issues, a replacement should be appointed.
A person’s ability to achieve their financial objectives and safeguard their legacy depends on their level of understanding of how a revocable living trust can work for them. When you are ready to create your revocable living trust, seeking legal guidance is wise.