by Attorney Curtis A. Edwards, J.D.
A Revocable Living Trust, also known as an Inter Vivos Trust, is a type of trust that is created during a person’s lifetime and, as the name implies, can be revoked or amended by the grantor at any time during his/her lifetime.
Revocable Living Trusts are frequently used by estate planning attorneys as the cornerstone of trust-based estate plans, and for good reason. The primary purpose of a Revocable Living Trust in an estate plan is probate avoidance. Probate is the notoriously long, expensive, and public court supervised process used to settle an estate. Having all of your assets in a trust allows you to avoid the probate process, allowing your estate to be administered privately by a trustee.
In addition to their ability to provide probate avoidance, Revocable Living Trusts also provide individuals with a great deal of flexibility and control over the terms of the trust after it has been established. The revocable and amendable nature of a Revocable Living Trust allow grantors to make changes as needed to account for circumstances and issues that could never have been foreseen or never contemplated when the trust was originally established.
For example, a trust originally created twenty-five years ago might direct that certain assets be distributed to an entity or person, such as a charity or family member, with whom the grantor no longer has a relationship. A Revocable Living Trust allows the grantor to update or amend the language of the trust to ensure that the asset distributions and other provisions in the trust accurately reflect their current intentions and wishes.
Another advantageous feature of a Revocable Living Trust is that it allows the grantor to avoid court-supervised guardianship or conservatorship proceedings should they ever become incapacitated. A Revocable Living Trust often contains language that allows a named individual to become the acting Trustee and manage the property held in the trust if the grantor becomes incapacitated as defined by the terms of the trust. These provisions account for scenarios such as a grantor who is placed in a coma as a result of an automobile accident, or a grantor who later in life develops dementia and can no longer manage his/her affairs.
Another important thing to note about Revocable Living Trusts is that once the original grantor dies, the trust becomes Irrevocable. This means that the terms of the trust can no longer be changed and, thus, sets in stone the final wishes articulated in the trust by the grantor before the time of their passing or incapacitation.
As you can see, a Revocable Living Trust has a myriad of benefits, paramount being their ability to avoid probate, that make them an excellent foundation for most estate plans. However, a Revocable Living Trust may not always be the best choice depending on your individual needs and circumstances. For this reason, it is important that you consult with an attorney to find out if a Revocable Living Trust is right for you.
If you have any questions or are interested in learning more about this topic, please contact Lin Law LLC at (920) 393-1190.