What is a Revocable Living Trust and Why Would I Need it?
When you pass away, your estate has to be administered, i.e., debts paid off, final taxes paid, final matters closed up, and assets distributed to heirs. Whether you have a will, a trust, or nothing at all determines how your estate will be administered after you pass away.
Revocable Living Trust Definition
There are many types of Trusts that serve different purposes, but Revocable Living Trusts are the typical type of Trust that is used in general estate planning to facilitate the administration of someone’s estate once they pass away. A Revocable Living Trust (“RLT”) is a Trust that you create during your lifetime and that is revocable by you during your lifetime. Once you pass away, that Trust then becomes irrevocable.
It is often misunderstood that a person needs to be wealthy to have a Trust, but that is not the case. RLT’s are many times the better choice in estate planning, compared to a Will because an RLT avoids probate and is therefore private to administer, can be less costly to administer, and can be more quick to administer. Administration in a probate court, especially in Los Angeles County, California, can take at least 2-3 years. Additionally, probate court records are public.
RLT’s also provide more options and creativity in design of distribution. For example, a Trust can maintain ownership of your assets after your death to be managed for minor children or any beneficiaries that may not be able to manage their finances wisely. Further, your assets can be managed by a Successor Trustee should you develop an incapacity at any time and, therefore, prevent the need for court intervention in order to provide for management of finances, etc.
We are here to answer any questions you may have about estate planning, the estate planning process, or probate. Together, we can craft a one-of-a-kind plan to ensure that you and your family are properly protected. Contact us today at 424-242-5021.
Nothing in this article should be construed as legal advice. For specific guidance regarding your situation, please contact an attorney.