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REVOCABLE LIVING TRUSTS

What is a Revocable Living Trust?

A Trust is a legal relationship in which assets are transferred to a Trustee to be used for the benefit of one or more beneficiaries. The person who establishes the Trust is called the Settlor. Upon accepting the assets as Trustee, the Trustee undertakes the obligation to use the assets in accordance with the Settlor’s directions. Generally, these directions are set forth in writing along with the other terms of the Trust.

A Living Trust is the name given to Trusts created during the Settlor’s lifetime and is usually created for the Settlor’s benefit during his or her life. After the Settlor’s death, the Trust assets are distributed to or managed for the benefit of family members or other designated beneficiaries. A Revocable Living Trust can be amended by the Settlor at any time during his or her lifetime and can also be revoked if the Settlor changes his or her mind. The Revocable Living Trust usually becomes irrevocable upon the Settlor’s death and the terms of the Trust cannot be modified except by court order.

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Can I Serve as Trustee of my Revocable Living Trust?

The self-trusteed living trust is a popular variation of Revocable Living Trust. You serve as the Trustee of your Trust while you are alive and competent and name a Successor Trustee to act in the event of your death or incapacity. Assets previously held in your sole name are registered in your name as Trustee of the Trust. So you (and your spouse or partner if you have a joint trust) are managing the Trust assets for the benefit of yourself since you are the Trustee and the beneficiary of your Trust. If you become incapacitated, the Successor Trustee continues the administration of the assets for the benefit of you and your dependents. After your death, the Trust can continue for the benefit of others.

“Karen, we really, really appreciate you! The better the planning we do, the luckier we have been, which is why I brought Aunt Betty to you 14 years ago, and we have sought your advice throughout. She is at peace knowing she doesn't need to worry about managing estate-related choices in her final days.“

Jay Smith

“Thanks for taking such good care of us and making it easy to ask questions. I appreciate not being made to feel stupid for asking questions. It was a lovely gift at a tough time.“

Charlie Patricolo

“Throughout the emotional roller coaster ride as my father’s Trustee, I am grateful you were there for me. You kept me grounded and focused on the job at hand, when I could easily have let my emotions take over. I am sure my Dad is smiling down on how everything came together, and happy I stayed with you as my legal counsel. I know I am certainly smiling. Thank you again.”

Lynn Speerschneider

“I would not hesitate to contact Karen in the future, or recommend her to friends and family, for estate planning needs. She made a confusing process very easy and painless.”

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“Karen is very personable and professional. Her method of determining my estate planning needs minimized the amount of time and effort on my part. She generated an estate plan that was fully customized for my special situation. It was a pleasure to work with her. I will continue to recommend her to my associates and friends.”

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“I’d like to start by saying THANK YOU! For the first time in my life I found myself in trouble. I spoke with you and realized that I was speaking to a warm and sensitive person. After our discussion, you referred me to someone you felt more appropriate or fitting to my situation. I am grateful to you both! If I need a Lawyer or a CPA again, I would want the support and guidance of the two of you! Thank you again, you have made a difference in my life!”

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REVOCABLE LIVING TRUSTS

Complimentary Consultation

Come on in for a complimentary 30 minute consultation to meet Karen and learn about what you should be considering in your estate plan to fit your personal circumstances. If you fill out our estate plan questionnaire and bring it with you, it will make the meeting more productive.

Complete our questionnaire and bring to the meeting.

What are the Advantages of a Revocable Living Trust?

All of the advantages of a Revocable Living Trust described below apply to a self-trusteed living trust.
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Probate Avoidance

Probate is the process by which title to assets owned in your name alone are transferred after your death. Probate may be expensive and time-consuming depending on the value and type of assets in your estate. Placing assets in a Revocable Living Trust is a method by which you can avoid the expense and delays sometimes associated with probate proceedings.
Even more costly and time-consuming than probate proceedings for decedents are guardianship and conservator proceedings for people who have become incapacitated. Through a Revocable Living Trust, you select a Successor Trustee to manage your affairs should you become incapacitated, thereby avoiding court proceedings and the court-supervised management of your assets and affairs.
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Privacy

When your estate goes through probate, your Will and other documents become public record. A Revocable Living Trust provides you with a greater degree of privacy because the trust provisions and the assets in your estate are not subject to public disclosure.
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Estate Tax Savings

If the value of your estate is more than the amount excluded from federal estate tax, it could be subject to estate tax when you die. A Trust may enable you to reduce or eliminate estate tax through the latest tax-saving techniques and ensure that more of your estate goes to the people or charities that you choose.
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Management of Assets for Children or Grandchildren

You select a person to serve as Successor Trustee so that Trust assets can be maintained in the Trust after your death instead of being distributed outright to beneficiaries who may be unable to handle the management of assets themselves due to their age or other factors. Without a Trust, a minor receiving an inheritance would need to have a Conservator appointed by the probate court to manage the inheritance. The Conservator is subject to the supervision of the probate court and must file annual accountings and get permission from the court to make certain distributions. This can be costly and all of this information would be a matter of public record. Then, at age 18, the funds would be turned over to the beneficiary, which you may think is a bit young. With a Trust, the Trustee can manage the funds until the beneficiary is more mature, in a private manner without court supervision, thereby maximizing the amount of funds available to your beneficiaries.

How do I choose a Successor Trustee?

Here are some factors to consider in choosing the right person to administer your Trust after your death and, remember, you should always name back-ups in case your named Successor Trustee is unable to serve:

  • Is your chosen Successor Trustee organized and good with managing assets?
  • Would your Successor Trustee be fair to the beneficiaries and communicate well with them?
  • Is the Successor Trustee local, or if not, how difficult would it be to administer the Trust if there is real estate to be sold and personal property in the home to be distributed?
  • Does your Successor Trustee know your child’s needs and your goals regarding education and activities?
  • Is your Successor Trustee honest and secure in their own finances, i.e. will they use your child’s funds only for your child’s interests and not for their own?
  • Do you wish to name Co-Trustees to act together or one person alone?

How do I place assets in a Revocable Living Trust?

To achieve full benefit from a Revocable Living Trust, it is important that appropriate action be taken to transfer assets into trustee ownership. This process is often referred to as “funding” the trust. Funding a Revocable Living Trust consists of retitling your bank accounts, bonds, stocks, real estate, and other assets so that the Trustee of the living trust is the owner of the assets. Funding also may entail changing the beneficiary of life insurance policies or retirement benefits to name your Trust as primary or contingent beneficiary. Often, your spouse is named as primary beneficiary and your Trust as contingent beneficiary of retirement benefits due to income tax considerations.
For more information on funding a Revocable Living Trust, see our
Checklist for Funding your Trust.