A living or inter vivos trust is one established during the lifetime of the grantor. A revocable living trust is one the grantor can revoke at any time.
A revocable trust has several advantages. Would this popular estate planning tool accommodate your current needs and benefit your family down the road?
Understanding the revocable trust
One of the major objectives in creating a revocable trust is to set up a repository for assets, including real property, that will transfer privately and seamlessly to your heirs following your death. However, the revocable trust is also useful in terms of holding assets in the event you become incapacitated and can no longer manage your affairs. A doctor’s confirmation of your inability to do so is usually all that is required for the trustee to step in.
When you create your revocable trust, you will name a trustee to take charge. Since you basically hand over control of your property and assets to this person, you want to select someone who is absolutely trustworthy and will follow your instructions. Keep in mind that after you die, your revocable trust becomes an irrevocable trust and the trustee you appointed will manage it.
Trusts are sometimes used for generation-skipping purposes to transfer wealth to grandchildren, to protect assets in case of divorce or simply to provide for your immediate family. Remember that a revocable trust is flexible in that you can make changes to it at any time or revoke it altogether. Also, this kind of trust is usually not subject to the probate process. In short, it is an estate planning tool that may be a good fit for you and your family.