In this short segment, I want to leave you with a short primer on what a Revocable Living Trust is. It should raise a lot of other questions that I will try answer in future articles and videos. Some other important other questions include why it is important to have a Revocable Living Trust and what are some details that you should be aware of in drafting a Revocable Living Trust.
Major disclaimer here, this is not legal advice. I am not your attorney. So, I cannot give you legal advice. I’m happy to serve as your attorney if we reach a mutual agreement. Please contact me when you are interested in going forward. Nevertheless, the following is some general knowledge I hope to impart and is not legal advice.
A Revocable Living Trust is a legal entity in which a Grantor can store assets. In simplest terms a Trust is a legal bucket that through its Trustees can own all sorts of property, real property, tangible personal property, ownership shares in corporations, and virtually anything of value.
A Revocable Living Trust must have four components: A grantor, and that is the person who establishes the trust, presumably you; Trustees, these are the person or persons who manage the trust assets, during life that will also be you; beneficiaries, these are the people who benefit from the assets and terms of the trust, once again, during life that is you; and finally a trust must control resources, assets, stuff. In legalese, the term is corpus.
The terms of the Trust determine how and to who the corpus is distributed after your death. In the terms is where the real art of Trust creation rests. Depending on the terms of the Trust, a grantor can protect his assets after he/she is gone. They can ensure their assets remain in Trust for a spouse or child who might otherwise squander the resources or otherwise use them in a way that you would not want them to—think of a child who is still maturing, in a sketchy relationship or maybe is challenged by substance abuse.
Also, the terms allow you to protect your assets from a former spouse or to protect your children of a previous marriage to ensure they receive a benefit from your estate, which they likely will not receive if you die before your new spouse and without an estate plan. And finally, the terms can be made to maximize the estate tax exclusion which is to minimize the actual estate tax that you pay.
Let me leave you with a tickler about the advantage to having your property in Trust instead of owned outright. Further videos will discuss these advantages more, but to leave you with a tease: a Living Trust is private, it rarely has to be aired in a court and by its nature is meant to avoid probate court.
So, if you can make a plan that distributes your assets to your loved ones with the least amount of stress possible, wouldn’t you want to do that? And if you can do that now for a fraction that your family will spend on probate expenses after you die, wouldn’t you want that too? Well, that is what you can achieve by creating a Revocable Living Trust.
If this raises questions that you would like to ask me or you want to schedule and appointment, contact me through my website at paulhiltonlaw.com or call my office at 858-240-6730.
Thanks, and talk to you next time.