Revocable or Living Trusts: What are they?
A revocable or living trust is a legal entity established during an individual’s lifetime to manage and distribute assets. The person creating the trust, known as the grantor or settlor, maintains control over the assets and has the flexibility to modify, amend, restate, or even revoke the trust as needed. This revocability distinguishes it from irrevocable trusts, offering the grantor a high degree of control over their estate planning strategy.
One of the advantages of a revocable or living trust is its ability to bypass the probate process. Assets held within the trust can be efficiently distributed to beneficiaries without the delays and public scrutiny often associated with probate court. Additionally, the trust provides a seamless transition in asset management in the event of the grantor’s incapacity. A successor trustee steps in to manage the trust, ensuring the continuity of financial affairs without the need for court intervention.
Beyond probate avoidance, a revocable or living trust offers privacy, as the terms and details of the trust remain confidential. This contrasts with a will, which becomes a public record during probate. The trust also serves as a tool for incapacity planning, allowing for the smooth transition of asset management if the grantor is no longer able to fulfill that role. While a living trust may not provide direct estate tax benefits, it can be part of a comprehensive estate plan that includes tax planning strategies. In addition, the use of a living trust can provide your beneficiaries with asset protection through the use of legacy planning.
Consult with an Experienced Virginia Estate Planning Attorney
If you are considering incorporating a revocable or living trust into your estate plan or would like personalized advice on the best approach for your unique circumstances, we can help. Call Wilson Law at 866-603-5976 or fill out our contact form and we will be in touch to schedule a meeting.