When used properly, revocable living trusts can be excellent tools as part of your estate planning. However, it’s important to know how they work and how they are different from other estate planning documents.
1. Revocable Living Trusts Are Not The Same As Wills
Many people fall back on a last will and testament as the quintessential form of estate planning, since it’s typically the most basic document that everyone is familiar with. Yes, it’s important that you do have a will, but a revocable living trust is another type of tool that can help you accomplish your other goals in a more effective way – and make it much easier for you and your loved ones.
Both a will and living trust have information about your inheritance instructions. In basic terms, they explain who gets what, when they will receive it, and how they will receive it. That being said, a trust gives you an added layer of protection when you want privacy and when you want to avoid the probate process.
No one enjoys having to deal with probate court. It is expensive, time consuming, stressful, and more prone to family fighting. A living trust, when used properly, can avoid all of this. Wills, on the other hand, must pass through probate court to work. This means they are open to the public and more costly and difficult to administer than trusts. Also, because wills passing through probate require notice to all family members, they are much easier to contest than trusts.
2. A Revocable Living Trust Can Accomplish Multiple Goals
As an added benefit, a living trust will give you peace of mind that you know what’s going to happen to you assets if something should happen to you and you are no longer able to manage your financial affairs. That’s right, living trusts not only makes it easier on your loved ones after you die, but can help you during life.
A properly-funded and well-drafted trust allows the person or people you choose to manage your trust assets the way you want, without the need for court intervention. You can also set up your trust so that your heirs receive the assets in a way you prefer, whether that is right after you pass away or structured out over time. When completed by an experienced estate planning attorney, your revocable living trust can also help minimize state and federal estate taxes, and provide other benefits.
Many people mistakenly believe that trusts are only for the wealthy. Nothing can be further from the truth! To learn more about whether a revocable living trust is right for you, and how one can help you ensure that your wishes are carried out both during your life and following your passing, contact the Michigan revocable living trust attorneys of Barron, Rosenberg, Mayoras & Mayoras, P.C. today. Call us at (248) 641-7070, or through our Contact page for a free consultation to discuss your estate planning needs.