Wealth Preservation LLC

Revocable Living Trust Documents

Unlike a will, which comes into play only after you die, the living trust can start benefiting you while you are still alive. The trust is revocable in nature, which allows you to make changes to fit your personal situation.

The revocable living trust is established by a written agreement or declaration that appoints a trustee to manage and administer the property of the grantor. As long as you're a competent adult, you can establish an RLT. In essence, the trust is like a rulebook for how your assets are to be handled when you die. As the grantor, or creator of the trust, you can name any competent adult as your trustee; some people prefer to choose a bank or a trust company to fill this role.

Let's look at some of the advantages of having a revocable living trust in place:

Avoidance of Probate - Probate is the legal process for transferring your property when you die. Establishing an RLT can be especially useful in avoiding expensive multiple probate proceedings when you own real estate or other property in several states. Assets named in trust avoid the costly courts and typically take precedence over the property designated in your will.

Changeable or Revocable - The living trust allows you to make changes (or amendments) to the trust while you are still alive.

Privacy Preservation - Trusts allow the transfer of your personal assets to remain private within the constraints of the trust document. The probate process may expose your estate to the public.

Eliminate Challenges to the Estate - The standard will can create family disputes at your death and be challenged for alteration by any member of your family. By using a trust, you can specifically disinherit anyone who posts a challenge to your wishes upon your death.

Segregation of Assets - This is useful for married couples with substantial separate property that was acquired prior to the marriage. The trust can help segregate those assets from their community property assets.

Assignment of Durable Power of Attorney/Guardianship - A living trust can be used to help control a guardian's spending habits for the benefit of your minor children. It can also authorize another person to act on your behalf if you become incapacitated and need someone else to make medical decisions for you.

Continuous Management - This allows the wealth that you've accumulated to continue to grow for multiple generations by using a professional trustee to manage your property. You can limit the amount of withdrawals to income only, with special emergency provisions if you wish.

Estate Tax Minimization - While the RLT is not a good tax minimization tool on its own, provisions can be included in the trust documentation to transfer wealth by establishing a credit-shelter trrust in the event of your death. This is a very effective tool to help reduce estate taxes for large estates that exceed the combined estate tax exclusion amounts.