A revocable living trust is a legal document that must be signed by the trust maker and a notary public. It lists the property contained in the trust, names a trustee, and states who has a claim to the property when the trust maker dies. Most property can be added to a trust by simply naming it in the document, but real estate and other titled property will need to be retitled in the name of the trust.
Benefits of a Revocable Living Trust
A revocable living trust is an important estate planning tool for two reasons:
- Avoid probate. All assets listed in a trust become non-probate assets, which means they pass to the person of your choice without the probate court’s involvement.
- Eliminate or reduce estate taxes. Revocable living trusts give you a sizable tax exemption—either eliminating or greatly reducing the estate taxes your heirs will owe.
Ownership of Assets
Technically, when you set up a trust, you are no longer the legal owner of the assets in the trust. However, when you name yourself as the trustee, you maintain full control of the assets until you become incapacitated or pass away. Then, the successor you’ve selected takes over.
Comparisons to an Irrevocable Trust
A revocable trust can be changed at any time, giving you the flexibility to adapt the trust as your wishes or financial circumstances change. An irrevocable trust can’t be changed once it is created.
In a revocable trust, the trust maker and trustee are the same person. In an irrevocable trust, the trust maker and trustee must be different people. Typically, irrevocable trusts are used for Medicaid planning to help people become eligible for benefits without spending down assets unnecessarily.
How Our Experienced Wilmington Estate Planning Attorneys Can Help
If you’re worried about probate and estate taxes taking funds away from your heirs, our dedicated estate planning attorneys can help you create a revocable living trust that will leave the legacy your loved ones deserve. Call our office in Wilmington or fill out the contact form on this page to schedule a free 15-minute consultation. You may also wish to review our calendar of upcoming seminars and workshops to help you better understand your estate planning options.