What is a Revocable Living Trust?
One of the most common and versatile trust planning tools is a Revocable Living Trust. A Revocable Living Trust (RLT) is an agreement with three parties: the Trust-makers (usually you and your spouse if married), the Trustees or Trust Managers (who may also be you), and the Trust Beneficiaries (you may even be the beneficiaries during your lifetime). For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further successor trustees or “back-up” managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trustmaker’s death.
With proper planning, the couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding.
Who Should Have a Revocable Living Trust?
Whether you are young or old, rich or poor, married or single, if you own titled assets such as a house and want your loved ones to avoid having to deal with the probate court at your death or incapacity, consider a revocable living trust. A trust allows you to bring all of your assets together under one plan.
Of course, there is no single strategy that is right for everyone. Whether an RLT is right for you will depend on your unique circumstances.
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