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TRUSTS AND ESTATE PLANNING
A Revocable Living Trust (RLT) allows you to "self-probate"
your assets while you are alive and competent. The funding of your RLT
allows you, as the trust maker, to transfer your assets into your RLT and
consequently avoid the probate process.
Although any attorney has the authority to create a RLT, the drafting
of your RLT should be done by an attorney who is trained and experienced
in the designing, drafting, and implementing of a RLT because this
document manages and disposes of all your hard-earned wealth. Make certain
you choose an attorney who is both qualified and experienced as a RLT
professional.
BENEFITS OF REVOCABLE LIVING TRUST PLANNING
- A Revocable Living Trust Avoids a Living Probate: If you
become disabled or are unable to manage your financial affairs, your
RLT will eliminate the need for a court-appointed guardian or
conservator to take control of your assets. This Living Probate
process can be very expensive. Your RLT should provide a set of
detailed instructions to guide your successor trustee as to how you
wish your property used during this time.
- A Revocable Living Trust Avoids a Death Probate:
With a
funded RLT your assets will go directly to your beneficiaries after
your death. There will be no court interference. There will be little
or no court costs at all. In most situations, there will be no delay
in distributing assets, and all your estate planning goals will be
completely private.
- A Revocable Living Trust Allows You to Distribute Assets in the Way
You Want: After your death, all property in your funded RLT will
be distributed by your named trustee according to your precise written
instructions. Assets can be left to your beneficiaries outright
upon
your death, or they can remain in trust and be distributed over time.
Each beneficiary can be treated individually by including any number
of separate trusts with different provisions to spell out the terms of
each beneficiary's share.
- A Revocable Living Trust is Easy to Create and Maintain:
An
attorney experienced in estate planning can easily create your trust
document to fit your needs. If you want to change a particular
provision, it can be accomplished with a simple amendment.
- A Revocable Living Trust Creates No Adverse Lifetime Income Tax Consequences:
Because your RLT is revocable, the income generated by the assets in
your trust is taxed to you as an individual and is reported on your
personal income tax returns. This means that your personal income tax
situation is exactly the same after the creation of your RLT as it was
before. You have the same exemptions, deductions, credits, and
liabilities. You will even continue to file your income tax returns
using the same Social Security Number you have always used.
- A Revocable Living Trust is Valid in Every State: The laws of
every state recognize the validity of a RLT. A truly beneficial
feature is that your RLT can freely cross state lines without any need
to redraft its terms to comply with local law.
- A Revocable Living Trust is Difficult for Disgruntled Heirs to Attack:
You have probably heard the stories about bitter contests over the
validity of a will submitted for probate. A RLT is not part of the
public probate process which invites and encourages disputes. It is
also not governed by the archaic and complex rules surrounding a Will,
and this makes a RLT less prone to attack.
- A Revocable Living Trust Gives You and Your Family Peace of Mind:
When your RLT is completed, you and your family will relax, knowing
you have taken every step to protect them in the event of disability
or death.
STAGES OF THE REVOCABLE LIVING TRUST PLANNING
There are three key stages in the RLT process. The first stage is the
design stage in which your hopes, dreams, and aspirations are carefully
organized into a sophisticated planning document. The second stage is the
drafting-execution stage. A skilled attorney should prepare, draft, and
help you sign your RLT. The third stage is the funding stage in which
assets are carefully transferred into your RLT. Each stage is critical to
the successful completion of your RLT plan. If you take the time to do the
job correctly, you and your loved ones will reap significant planning
benefits.
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