A Revocable Living Trust is a powerful legal tool that you can use to preserve your assets and ensure your wishes are carried out when you are no longer here. This flexible estate planning strategy may provide financial security and peace of mind. We’ll discuss the main components of a revocable living trust and how they may aid you and your family in this post.
Key Revocable Living Trust Functions:
- Avoiding Probate & Protecting Assets:
Many people establish a revocable living trust to protect their assets and make transferring them to heirs simpler after death. Trusts shield assets from the probate court, a time-consuming and expensive legal process. This means beneficiaries may get trust assets promptly and without court intervention.
- Flexibility & Control:
The grantor enjoys significant control over trust assets during their lifetime. After placing assets in the trust, the grantor can buy, sell, or invest the trust assets as needed. Also, a revocable living trust allows the grantor to revise or terminate the trust if circumstances change.
Key Roles:
- The Grantor or Settlor: The person the creates the trust and transfers assets to the trust.
- The Trustee: The trustee manages trust assets according to the grantor’s instructions. The grantor usually serves as the initial trustee throughout their lifetime and appoints a successor trustee to serve afterward.
- Beneficiaries: These are the people the grantor chooses to receive the trust assets after the grantor passes away.
Assets To Transfer:
Typical assets that are placed in a living trust comprise:
- Real estate
- Checking and savings accounts
- Life insurance and annuity plans
- Brokerage accounts, stocks and bonds
- Business interest
- Personal property
Steps for Creating a Living Trust:
Creating a living trust in Virginia can be broken down into five general steps:
- Take an inventory of your property and assets
- Determine who your beneficiaries will be
- Choose a successor trustee
- Draft and execute the trust document
- Transfer property to the trust.
Creating a living trust is not for everyone. The best way to determine if a living trust is for you is by consulting your financial advisor and an estate planning attorney.
