The end of the year of 2011 is about ended. For many couples, business owners, and individuals, the Year 2012 is a fresh start and a opportunity to build a better financial and legal foundation for you and your family. I often year that most individuals and families delay their plans to update their will or revocable living trusts. Many others have simply failed to gather a will or a revocable living trust altogether.
What is a Revocable Living Trust or "Living Trust"?
A Revocable Living Trust is an estate planning document that creates a separate entity that is distinct and separate from you. Like a will, a Revocable Living Trust is a written agreement that explains how to distribute your assets upon your death. Unlike a will, a Revocable Living Trust does not have to undergo probate court because it is separate and distinct from you. Simply put, one must probate items that are in their personal name. If your house, bank accounts, and other assets are not in your personal name, the probate is unnecessary. The purpose of the Trust Agreement is to outline your wishes such as who should inherit key personal property items, your funeral wishes, and other important legal considerations.
Furthermore, a Revocable Living Trust offers several other benefits such as creditor protection for your beneficiaries and protection against incapacity. The reason behind the word "Living" is your Trust is a document that begins immediately after it is created unlike a will. The purpose of a will is for death purposes. On the contrary, a Revocable Living Trust is designed to create a smooth transition upon death and an incapacity. Thus, a Revocable Living Trust has language that automatically works with your power of attorney for property that designates a trustee to pay your bills and manage your financial matters when you are unable to manage those things. Often times, parents want their inheritance to go to their children and do not want their in-laws to access their inheritance for their children. Unlike a will, a Revocable Living Trust has a "spendthrift provision", which protects your beneficiaries inheritance from their creditors such as a divorcing spouse or a mortgage foreclosure.
In conclusion, a Revocable Living Trust is an excellent estate planning tool to begin your 2012 New Year! Sean Robertson is Managing Partner of Robertson Law Group, LLC, which concentrates in estate planning and asset protection law for business owners, professionals, and families. Robertson Law Group, LLC may be reached at (312)-854-7102. Our website is www.RobertsonLawGroup.com.
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