Despite its importance, surveys have shown that only 2 out 5 people over 45 have a will. Most people put off writing a will because it is unpleasant thinking of one’s mortality. But uncomfortable as it may be, it must be done. For purposes of this post, we will assume you already have a will and we will deal deal with another important aspect of estate planning, living trusts.
First, a revocable living trust is a written agreement designating someone to be responsible for managing your property, It’s a living trust because it’s established while you’re still alive. It’s “revocable” because, as long as you’re compos mentis, you can change or dissolve the trust at any time for any reason. Usually, a living trust becomes irrevocable when you die.
The way it is usually set up is that you name you and your spouse would name yourselves as trustees so you can have control over your assets. You can do what you want with them.
What are the limits of a living trust?
A living trust can provide you with peace of mind knowing that your money and assets are safe in the scenario where you become unable to handle your own affairs. In certain cases it can eliminate the need or powers of attorney.
What it can’t do is protect itself from a disgruntled heir. Santa Monica attorney Jeff Condon told AARP, “A living trust can resolve some of the most common family conflicts that may arise in the inheritance arena.” However, a dissatisfied heir an still challenge the trust in court just like a will.
Who are the other trustees?
Well, we settled that the first two trustees will be you and your spouse. After th two of you you wlil need to nam sucessor trustees. Most likely, those would be you children. But if you don’t think your kids will do what you want, you can name anyone as a fiduciary professional such as bank department.
How do you fund the trust? The good news is you don’t have to put any money into the trust when you set it up and pretty much there is no work involved. You can take assets out or a them without consulting you attorney.
Do you need an attorney top set up a trust?
While you don’t need an attorney to manage your trust. You do need one to set one up. We can regale you with horror stories about people who set up their own badly done trusts.
Is a revocable living trust right for me?
It may or may not be you need to weigh the advantages and disadvantages. For simple estates with few assets, it may not be since setting up a trust involves more money than a will. We suggest you conult with a competent financial adviser to help you decide.