Posted on: Dec 20, 2016
A revocable living trust is a written agreement in which an individual, known as the trustor, appoints a trustee and sets forth how the assets of the trust are managed, both during the trustor’s lifetime and after the trustor passes away. Essentially, the trustor transfers some or all of his or her assets to the trust, so that it becomes property of the trust. Assets such as the trustor’s residence and bank accounts typically go into the trust, but retirement accounts may not go into the trust.
In most cases, the trustor acts as the trustee, or manages the assets of the trust, during his or her lifetime. The trustor also should appoint an alternate trustee, or a successor trustee, who will manage the trust assets if the trustor becomes incapacitated or passes away. The successor trustee often will be a trusted relative or friend of the trustor, but also can be a professional fiduciary, such as a trust company.
While a revocable living trust typically takes the place of a detailed will, a so-called “pour-over will,” is needed as well. The pour-over will addresses any assets that were left outside of the trust by transferring them into the trust after death through a probate process. A revocable living trust is usually part of a larger, more comprehensive estate plan, which includes powers of attorney and advance directives.
The primary advantage of a revocable living trust is avoidance of probate. In many states, California among them, probate is complex and quite expensive. Washington and Idaho, on the other hand, have very simple and inexpensive probate procedures. Moreover, to protect assets for the benefit of a surviving spouse against Long-Term Care costs, you must have a will, not a revocable living trust, which makes probate necessary.
If you think that a revocable living trust might be right for you, you should not hesitate to explore how this option would meet your needs. This inquiry involves determining not only what options are available to you, but what options are best tailored to meet your objectives and preserve your assets. At Elder Law Group PLLC, our Spokane Estate Planning lawyers can help you make sense of these options, and support you through the decision-making process. Contact us at 509.468.0551 to schedule an appointment.