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When you are physically and mentally able, you should be wise with your finances and assets. However, there may come a point where you have diminished capacities and can no longer make important financial decisions. Likewise, you want to be prepared for your death so your surviving loved ones can have the security and peace of mind they need. With a revocable living trust, you can decide who will inherit your assets and how the money is distributed.
A Brief Description
A trust is a legal document that states what will happen to your money and other assets when you die. In a revocable trust, you can change the provisions as you desire and as circumstances change. You name beneficiaries and state who will receive what upon your death. In the meantime, you will appoint a trustee to oversee your finances, such as taxes and income. The person who sets up the trust can handle this role.
What it Includes
Your trust grants legal authority for the trustee to handle your money after you die and ensure that it passes to the beneficiaries. It can include savings accounts, checking accounts, retirement accounts, property and other possessions. This document is effective from the day you write it.
People who prefer trusts over wills do so because a revocable trust will not pass through probate. These legal proceedings can be lengthy and costly. Skipping this step can help the transition of your estate go much more smoothly. Also, you have more flexibility to alter the trust as you see fit or as your attorney may advise. Setting up a trust will protect your money and help ensure that there is no confusion over your estate. It can also eliminate family squabbles and divisions.
Another aspect of a revocable trust that people like is that there is no need to go to court when you hand over your finances to the trustee. This is an automatic process that will take place if you are deemed unable to make sound financial decisions such as pay bills, apply for a loan, withdraw money or sell your home. You can even specify how much in the trust your minor beneficiaries spend from the accounts they inherit.
Consider the benefits of a revocable trust and why it may make sense to you. Meet with an estate planning lawyer, like from the Yee Law Group, to discuss your next steps and how you can protect your assets.