One of the many great reasons to have a revocable living trust is if you own property in more than one state. Without a trust, the probate process for multiple states can be tedious, slow, and expensive. Revocable trusts are also beneficial for those who want to keep their records and asset information private after death. The succession process of wills can make your estate public record, accessible to anyone.
A living trust or a revocable living trust can help your estate and heirs avoid the complications and costs of probate. However, a trust cannot designate guardianship for minor children, which is why wills and living trusts are often used together as part of an estate plan. A revocable life trust is a powerful tool to start the estate planning process. It offers flexibility that you can't get from other trusts or wills. This is especially useful for people who are just starting to plan their wealth and are not yet sure exactly who to name as beneficiaries.
The assets of a revocable living trust are not protected by current or future creditors in the event of death (but the assets of a living irrevocable trust may be protected by creditors). To create a revocable living trust, you must complete a revocable living trust form appropriate to your state. A revocable living trust or a living trust also allows you to plan a smooth transition in case the grantor becomes incapacitated. However, since this is a revocable living trust, you retain control of the assets, even if they no longer belong to you, as long as you are alive. The trust controls the assets while the grantor lives and distributes them to the designated beneficiaries after death.
For example, if you want to change beneficiaries after a revocable living trust has been established, you can do so. Both trusts and living wills allow you to name beneficiaries and plan the distribution of your assets. You can stipulate the living situations and spending habits of minor children under the terms of your trust. This is particularly true if you didn't properly add all of your assets to your trust, or if your trust doesn't have enough funds to cover the costs of distributing your assets. In addition, active trusts prevent the probate process, reduce the possibility of legal disputes, and keep your documents private. After establishing the active trust or the revocable living trust, you still have to transfer the assets to the trust.
A revocable trust is a legal document that allows the grantor (the person who creates the trust) to keep your personal assets and transfer them to the trust property during your lifetime. Active trust allows you to make changes (or amendments) to the trust document while you are alive, at your own discretion. You should also keep in mind that revocable trusts don't offer the same type of protection as irrevocable trusts against creditors. Therefore, the Internal Revenue Service considers that the assets of revocable living trusts are still part of the grantor's estate, which is why revocable living trusts do not offer much of a reduction in income or wealth taxes. Other personal property (such as your jewelry or furniture) can be included in a property list and attached to the trust document with a reference that it will be transferred to the trust. In conclusion, having a revocable living trust is an excellent way for individuals to protect their assets from probate court proceedings and keep them private after death. It also provides flexibility when it comes to naming beneficiaries and making changes while you are alive.
However, it does not provide protection against creditors like an irrevocable trust does and it does not offer any tax benefits either. Ultimately, it is up to each individual whether or not having a revocable living trust is right for them.