There are many benefits to a revocable living trust that are not available in a will. An individual can choose to have one or both, and an attorney can best clarify the advantages of each. If the person engaged in planning his or her estate wants to retain the ability to change or rescind the document, the living trust is probably the best option since it is revocable.
The document is called a “living” trust because it is applicable throughout one’s lifetime. Another individual or entity, such as a bank, can be appointed as trustee to manage and protect assets and to distribute assets to beneficiaries upon one’s death.
A living trust will also protect assets if and when a person becomes sick or disabled. The designated trustee will hold “legal title” of the assets in the trust. If an individual wants to maintain full control over his or her property, he or she may also choose to remain the holder of the title as trustee.
It should be noted, however, that the revocable power that comes with the trust may involve taxation. Usually, a trust is considered a part of the decedent’s estate, and therefore, an estate tax applies. One cannot escape liability via a trust because the assets are still subject to debts upon death. On the upside, the trust may not need to go through probate, which could save months of time and attorneys’ fees.
The revocable living trust is contrary to the irrevocable living trust, in that the latter cannot be rescinded or altered during one’s lifetime. It does, however, avoid the tax consequences of a revocable trust. An attorney can explain the intricacies of other protections an irrevocable living trust provides.
Anyone who wants to keep certain information or assets private, will likely want to create a living trust. A trust is not normally made public, whereas a will is put into the public record once it passes through probate. Consulting with an attorney can help determine the best methods to ensure protection of assets in individual cases.