A revocable living trust is a legal document a lawyer creates that holds assets that are part of the estate of the owner of the trust. It receives its name through the fact that the owner of the trust has the ability to revoke the trust at any time while they are still alive.
A revocable living trust is a living document. This means that the owner of the trust can choose to change the trust at any time as well, as long as they have the mental and physical competency to handle the task.
Once the owner of the trust passes away, however, no more changes may occur to the trust document.
Benefits of Starting a Revocable Living Trust
When looking to start the estate planning process, working with an Orlando estate planning attorney can help you understand some of the benefits of different types of documents, including a revocable living trust.
The terms “living trust” and “revocable living trust” are interchangeable.
Reducing the Chance of Legal Challenges
The legal system in Florida considers a trust to be a legally binding, separate entity. Unlike a will, which heirs may be able to legally challenge, the courts rarely entertain challenges to a revocable living trust.
By reducing the chances for legal challenges, the totality of your estate can pass to your heirs, rather than having some of the estate’s value subjected to legal costs to defend the will.
Keeping Your Estate’s Holdings Private
Whereas a will must go through probate court to reach a settlement, the revocable living trust can skip probate court. When your estate ends up in probate court, the assets and legal documents become part of the public record that anyone can search if desired.
With a living trust, though, your records and assets remain private. They do not go through probate court, so no one can search through them as part of the public record.
Faster Distribution of Assets
By skipping probate court, the beneficiaries of your estate can receive the assets far more quickly through the revocable living trust than through a will. If someone challenges a will, delays could last months or years. This almost never happens with a living trust.
Steps to Follow for Creating a Living Trust
An attorney from our firm can meet with you to determine your wishes that should be part of the revocable living trust. The attorney then will create the legal document that serves as the living trust.
Determining the Trustee
As part of creating the revocable living trust, you will have to designate someone to serve as a trustee. The trustee will handle the management of the assets in the estate as long as the owner of the estate (the grantor) remains alive.
Once the owner passes away, the trustee will play a role in managing certain aspects of the estate until the distribution to the heirs occurs.
Some of the tasks the trustee will perform include:
- Paying bills
- Making decisions about investments
- Paying any creditors who come forward after the death
Serving as Your Own Trustee
As the owner of the trust, you have the ability to serve as your own trustee, if desired. If you and your spouse own the trust together, you can serve as co-trustees.
Selecting a Third Party to Serve as the Trustee
If any question exists about your mental or physical capability to serve as your own trustee, you can have a third party, such as a relative or a banker, ready to take over the duties.
By having a trusted person or entity ready to serve as trustee, you can have the peace of mind of knowing that your estate is in safe hands, should anything happen to you prior to your death that leaves you unable to manage your own estate.
The person or entity you select to serve as trustee must be capable of doing the job in a manner that follows all state laws.