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There’s a huge misconception that Revocable Living Trusts (RLT) are just for the elderly and wealthy. But here’s the thing…life’s curveballs don’t just affect the wealthy and the elderly—they affect everyone.
That’s why RLTs are so important. They give peace of mind and place a shield of protection around your loved ones and assets, securing your legacy in the event of your passing.
In this article we’ll dive into what makes RLTs such powerful tools and why you need one. Let’s get started!
What Exactly is an Revocable Living Trust?
Designed to help you carefully plan and protect your estate, an RLT is a flexible estate planning tool created while you’re living to ensure that you meet your financial and family goals after you pass away.
The courts treat it as a separate legal ‘person’, so it solves the problem of estates having their assets tied up in probate.
The three roles under a revocable living trust:
The person who makes the trust
This person might be called the settlor, grantor, or trustor.
The person who makes decisions about the money/property in the RLT.
They are called the trustee and can be an individual or a financial institution. If there is more than one, they are considered co-trustees. A successor trustee may also be named and acts only if a trustee can no longer fulfill that role. The person who makes the RLT can name herself as trustee and you as co-trustee immediately, or you may be a successor trustee who can act when she can no longer make decisions. As a trustee, you are a fiduciary.
A person or people who receive money or property from the RLT.
They are called beneficiaries. The person who makes the RLT may be the only beneficiary while she is alive, or she may name co-beneficiaries who receive some money or property from the RLT before she dies. The people who receive money or benefits from the RLT after the person dies are called residuary beneficiaries.
Why Do I Need a Revocable Living Trust?
Regardless of your net worth, it’s important to have a basic estate plan in place – especially if your goal is to protect your assets from estate taxes and avoid the probate process and probate proceedings as this requires more than just a last will. And of all the estate planning options available, RLTs are the most robust, coming with many advantages.
Advantage No. 1: Hold any property type you want
One such advantage of an RLT is that the property types you can hold are endless including things such as: your personal residence, personal bank accounts, jewelry, intellectual property, life insurance, works of art, and more.
No one should be able to decide what’s important and what’s not. Some things may hold no monetary value, but hold sentimental value which you can pass down through the generations as a priceless heirloom.
If it’s important to you, you can put it in your RLT.
Advantage No. 2: Have Control Over Your End-of-life Care
Life is full of curve balls. You never really know what’s around the corner. It’s important that you’re prepared for anything. With an RLT you can set up end-of-life medical directives. This allows you to specify who you want to make health care decisions if something happens and you cannot make these decisions for yourself.
You can also include a do-not-resuscitate (DNR) and do-not-intubate (DNI) order, as well as instructions surrounding organ donation. So many people forget to do this, leaving their family to make an impossible decision for them. Take the burden of deciding your end-of-life-care off of your family.
Advantage No. 3: Place your affairs in capable hands
Having control over your affairs even when you’re unable to, is yet another benefit of having an RLT. It lets you decide who you want to handle your affairs and name a Successor Trustee. This person will take over the management of your affairs should you become mentally incapacitated and unable to manage them yourself.
In Conclusion
No one likes to think about estate planning, but without one your wealth and your family will never truly be protected and you’ll actually end up thinking about it more. Securing your legacy with an RLT frees your mind to focus on other things and enjoy your life.
Here at Inc Authority, we understand the importance of RLTs, which is why we offer it as one of our services. Our independent, in house law firm featuring estate planning attorneys will answer all your questions. Contact our estate planning experts today to learn more and get started setting up your RLT!
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