A Revocable Living Trust (RLT), often referred to simply as a living trust, is a legal document that allows an individual (the grantor or trustmaker) to place their assets and property into a trust during their lifetime, with the specific terms and conditions for managing and distributing those assets both during their lifetime and after their death. The grantor typically serves as the initial trustee and beneficiary of the trust, maintaining control over the assets placed within it.
Here are some key features and benefits of a Revocable Living Trust:
- Revocability: One of the primary advantages of a living trust is that it can be altered, amended, or revoked by the grantor at any time during their lifetime, as long as they are mentally competent. This flexibility allows the grantor to adapt the trust to changing circumstances or preferences.
- Probate Avoidance: One of the main reasons people create living trusts is to avoid the probate process. Probate is a legal proceeding through which a deceased person’s assets are distributed to heirs or beneficiaries. It can be time-consuming, expensive, and subject to public scrutiny. Assets held in a living trust typically bypass probate, which can save time and money for the estate and provide for a more private distribution of assets.
- Privacy: Unlike wills, which become public documents when they go through probate, the terms of a living trust generally remain private. This can help maintain the confidentiality of your financial affairs.
- Continuity of Management: A living trust provides for the seamless management and distribution of assets in case the grantor becomes incapacitated. This is because the trust designates a successor trustee (or trustees) to take over if the grantor can no longer manage their affairs.
- Flexibility in Asset Management: The grantor can specify how the assets in the trust are managed and distributed during their lifetime and after their death. This allows for customized plans for beneficiaries, such as staggered distributions, provisions for minor children, or special needs trusts.
- Avoidance of Ancillary Probate: If you own property in multiple states, a living trust can help avoid ancillary probate proceedings in each state where you own property. This can simplify the distribution process.
It’s important to note that while a living trust can be a valuable estate planning tool, it is not a one-size-fits-all solution. Whether or not a living trust is appropriate for you depends on your individual circumstances, the complexity of your assets, and your estate planning goals. Consulting with an attorney or estate planning professional is advisable to determine the best approach for your specific situation.
- The law office of elder law attorney Scott C. Painter, P.C., is located in Wyomissing (outside of Reading, PA, in Berks County,) and offers trusted legal services in the areas of elder law, including nursing home planning, trust and estate services, and veterans benefits. Scott C. Painter is a Certified Elder Law Attorney (CELA®), and he is also a member of the National Association of Elder Law Attorneys (NAELA).
- If you have an issue or question, we encourage you to call us. With legal matters, time is of the essence. Call us for a consultation at 610-378-5140. The $300 consultation fee is waived if Attorney Painter is retained to perform services.