The Benefits of a Revocable Living Trust
Revocable living trusts serve several important purposes. Unlike a common will, the creator of a trust—sometimes referred to as the settlor, trustor, or grantor—can set conditions for the disbursement of an inheritance. They could, for example, stipulate that a child only receive funds after they reach a certain age or dictate that some portion of assets be used exclusively for education or health care emergencies.
If the trustor's life circumstances drastically change, they could dissolve the trust, add new beneficiaries, or recover deposited assets.
Revocable living trusts have other advantages, too. For instance:
- A revocable living trust allows its founder to retain control of their assets while they are still alive.
- The grantor is afforded the right to transfer assets into and out of the trust’s control as they see fit.
- The founder can rescind, revoke, or alter the terms of the trust to account for unforeseen circumstances.
- A trust may contain instructions on how to manage a home, real property, or other assets once the grantor has passed away.
- A trust can help reduce your individual taxable income and eliminate intergenerational wealth taxes for your heirs.
However, the single biggest benefit of a revocable living trust is that it provides an escape from the expensive, complex, and emotionally devastating probate process.
Creating a Living Trust in California
You could establish a living trust in California by:
- Determining whether you want to create an individual or shared trust
- Conducting an overview of your assets and deciding which possessions and properties you should transfer into the trust
- Speaking to your loved ones, relatives, or attorney to select a successor trustee, who will fulfill the terms of the trust after you pass away
- Drafting, signing, and notarizing the trust document
- Re-titling your assets to the trust
While forming a revocable living trust is not necessarily difficult, trusts are subject to many state and federal laws. You should always seek a California estate planning attorney’s guidance before finalizing your estate plan. Any minor mistake could jeopardize your life’s work and the legacy you intend to create.
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