Most people consider a will to be their primary estate-planning tool, but relying on a will can have disadvantages.
Assets listed in a will must be processed in state probate court, which can be both time-consuming and expensive. And once the will is filed for probate, it is a public document and may be examined by anyone.
Another option may be a revocable living trust.
What are recoverable living trusts?
A revocable living trust establishes a legal entity with the power to hold title to assets.
It is created and governed by the terms of a trust agreement. This agreement lists the assets held in the trust, the individual with the power to manage and distribute those assets (the trustee), and the individuals entitled to benefit from those assets (the beneficiaries).
Depending on state law, you may be able to act as trustee and receive income from the trust as a beneficiary during your lifetime.
A way to avoid delays
The advantage of a revocable living trust is that it avoids probate, and the associated delays and costs.
Also, because the trust will pass outside the probate process, the trust agreement is more likely to remain confidential and will not be subject to public scrutiny.
However, a revocable living trust is not for everyone. Establishing one requires the services of an estate-planning professional, and there can be tax consequences.
Individuals considering using a revocable living trust as part of their estate plan should consult an advisor or attorney specializing in estate planning for advice and assistance.
The information contained in this article is merely a summary of our understanding and interpretation of some of the current laws and regulations and is not intended to be legal or tax advice.