Revocable Trust for Dummies: A Simple Guide to Get Started

Revocable Trusts have gained popularity today because they give the owner the power to continue to handle affairs in his lifetime with the security of knowing that upon his death, his assets will distribute efficiently. In this Revocable Trust for Dummies guide, you will learn how these trusts offer flexibility, control, and privacy. This paper will cover what a living trust is, why you might create one, and some other important considerations related to setting up a Revocable Trust for Dummies.

What is a Revocable Trust?

A Revocable Trust for Dummies, also commonly referred to as a revocable living trust, is a document created during one's lifetime in which assets are transferred into a trust for his benefit. The most important aspect relating to this type of trust is that it is revocable, which simply means the creator of the trust, known as the grantor, can make changes, amend, or entirely revoke the trust while he is still alive. In most cases, the same grantor is also the original trustee responsible for handling and dealing with the property within the trust. If the grantor is unable or deceased, the transfer of powers over the Revocable Trust for Dummies goes to another person known as a successor trustee who will take care of the trust in accordance with the provisions within the trust document.

Revocable Trust for Dummies

Revocable Living Trust for Dummies: A Simple Guide

A living revocable trust is established during the lifetime of the grantor and can involve any form of asset: real estate, bank accounts, investments, and personal property. Here's a simplified breakdown of how it works:

1. Creation: The grantor makes the trust document, in which he includes terms of the trust, including who will be trustee of the trust and who will be beneficiaries of the trust assets.
2. Funding the Trust: The grantor is the one who transfers the ownership of their assets to the trust by changing the title of the assets in the name of the trust.
3. Management: As long as the grantor lives and remains competent, the assets inside the trust can be managed and used by him just as before. The trust is "invisible" in day-to-day living because the grantor retains control.
4. Incapacity: The successor trustee can then take over when the grantor becomes incapacitated and continue to manage the assets held in the trust without the need for a guardian appointed by the court.
5. At Death: Upon the death of the grantor, the trust becomes irrevocable. The successor trustee will execute the distribution of all the assets in accordance with what was provided in the instrument of trust and outside of probate, thereby maintaining privacy for the deceased's estate.

Revocable Living Trust for Dummies

Benefits of Setting up a Revocable Trust

Some of the most common and very persuasive reasons for considering the setup of a revocable trust are highlighted below.

1. Avoidance of Probate: One of the key advantages reaped from the employment of a revocable trust relates to the fact that it can almost completely avoid the probate process. This could have the effect of saving the beneficiaries a lot of time and money, as the probate process can be highly and unwontedly lengthy and costly.
2. Privacy: Whereas a will, when entered into probate, becomes a public record, a trust remains private. This means that the details of the trust, including who receives which share of the assets, are not made public, thus providing some degree of privacy for both the grantor and beneficiaries.
3. Flexibility: Because the trust is revocable, the grantor can change it at any time. That would include adding or removing assets, changing beneficiaries, or even revoking the trust.
4. Management During Incapacity: One of the very important advantages of a revocable trust is that it allows for uninterrupted management of the assets if one of the grantors becomes incapacitated. There is no need to have the court declare the grantor incompetent and appoint a guardian or conservator.
5. Control of Distribution: The settlor can stipulate precisely when and how the beneficiaries are to get the assets. More specifically, the assets can be disbursed for a period of time-not necessarily all at once. This can prove particularly helpful in the event that the beneficiaries may be minor age children or special needs children.

Benefits of Setting up a Revocable Trust

How Long is a Revocable Trust Good For?

A living revocable trust operates to the extent the grantor lives and decides to continue said trust. Since this is a revocable trust, the grantor can amend or revoke at any given time the trust has the grantor's mental capacity.

When the grantor dies, the trust is usually rendered irrevocable, and the successor trustee implements the distribution of assets in accordance with the deceased person's wishes.

It may be that a revocable trust would continue for a very long period of time beyond the death of the grantor, provided, of course, it contains provisions for management beyond that date for the benefit of beneficiaries.

Conclusion

The Revocable Trust for Dummies is a formidable estate-planning tool, affording one flexibility, control, and a degree of privacy. Understanding the basic mechanism of how a revocable trust works, the benefits accorded by it, and the length of time in which the trust exists will amply supply one with the ability to make an informed decision whether this is the right avenue to pursue in relation to their estate planning needs. With the help of One Pacific Trust and an attorney specializing in estate planning, one may ensure that the Revocable Trust for Dummies is tailored in such a manner as to meet particular goals and that the same comports with local laws and regulations.