Settling your affairs in case of your death or disability can often be a chaotic experience concerning all sorts of legal and logistical issues. Normally, individuals draft living trusts detail what’s to be done with their assets after becoming incapable of deciding.
This legal document—a living trust—is not something that can be easily changed by the individual whom it concerns; for all intents and purposes, is set in stone. However, a revocable living trust grants the benefits of a regular trust but offers some flexibility. Be aware of the four advantages of revocable living trusts to better manage your assets.
Greater Flexibility
Revocable trusts allow the grantor to name unrelated or out-of-state individuals as the trustee to administer property after the grantor’s death. The grantor may also wish to rename the trustee at some point before their death, usually due to changing circumstances. This changing of the trustee is far easier, and the process is streamlined as opposed to a typical trust. This prevents any last-minute complications to ensure a clear transfer of administration.
Continuity of Management
In the event that the grantor of the trust becomes disabled, they can still hold power over their assets with a revocable trust. The alternative, without this living trust, is potentially a lengthy court battle to determine who is in charge of the affairs if it is the grantor or a third party. The grantor still retains clear rights over their property, and it helps to avoid complex legal proceedings.
Availability of Assets
Under normal trusts, the availability of assets can be unknown; sometimes, trustees may have to wait a period of time before those assets are available to them. Revocable living trusts also grant the ability to pay off outstanding debts, estate taxes, and administration expenses immediately without waiting for a probate decree or issuance of a preliminary letter.
Avoiding Probate
Probate is a legal proceeding that determines the validity of a will; this can be a time-consuming and costly process. While jurisdictions have different regulations regarding the validation of a will, revocable living trusts very often circumvent the process, avoiding the necessity of these expensive legal dealings. You’ll need to consult a wills and trust attorney for the specifics, but revocable trusts offer you a chance to eliminate these expenses.
Know What Is Best For You
Dealing with the administration of your assets after death or disability can be an uncomfortable process—but it’s a necessary one. When drafting your living trust, you need to choose the method to best carry out your will. Knowing the advantages of a revocable living trust allows you to make an informed decision regarding these legal questions and simplify the procedure for your trustee.