What Is a Revocable Living Trust?

    A trust is a legal arrangement that allows you as the grantor to control the distribution of your assets at your passing without having those assets go through a probate proceeding. A revocable living trust is a specific type of trust that you, the grantor, establish and fund (i.e. add assets to) during your lifetime, with the ability to change or revoke it at any time. It allows you to manage your assets while alive and determine how they will be distributed to your beneficiaries however you choose when you pass. If you are married, then depending on the classification of your assets, you may choose to have a joint revocable living trust with your spouse.

    Most commonly, the grantor is the initial trustee of the trust. In the event that the grantor cannot act as the trustee, then other successor trustees are appointed in the trust by the grantor. Successor trustees step into the role to manage and distribute the trust assets per the terms of the Trust. Often, a Grantor no longer serves as a Trustee due to incapacity or death. The Trustees can be trusted individuals, corporate trustees or private professional fiduciaries. To learn more about these options, please discuss with your advisor.

     

    Factors of a Revocable Living Trust

    A revocable living trust offers many benefits, making it a potentially valuable addition to many estate plans.

    • Potentially avoids probate: One of the benefits of a revocable living trust is that it can potentially avoid the probate process, which can be time-consuming and costly. Because assets held in the trust are not subject to probate, distribution to beneficiaries is faster and more efficient.
    • Control: You, the grantor, typically manage the assets in the trust during your lifetime, and the revocable living trust contains detailed instructions for how your assets should be handled and distributed when you pass away.
    • Flexibility: As the grantor and while the trust is revocable, you can revisit and revise a revocable living trust as your wishes or circumstances evolve.
    • Incapacity planning: A living trust includes provisions for the management of your assets if you become incapacitated and names a successor trustee to take over the management of the assets upon your death or incapacitation without court intervention.
    • Privacy: Unlike a will, which becomes public record once it is probated, a revocable living trust allows you to keep the details of your estate and distribution plan private.

    These are just some of the reasons why some EP Wealth clients include revocable living trusts in their estate plans. Our financial advisors take a holistic approach, combining these and other tools to manage assets, establish directives, and strive to reduce estate taxes wherever possible.

     

    Is a Revocable Living Trust Right for you?

    While a revocable living trust may be useful in many situations, it may not be ideal for every situation.

    Consult with your estate planning professional to explain the pros, cons, and alternatives of wills, trusts, and other tools so you can make informed decisions about your plan. Find an EP Wealth advisor near you to get started today.

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    • Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions. Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice.
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