By Sativa Boatman-Sloan
Attorney At Law
Springfield, MO— by Sativa Boatman-Sloan, Attorney at Law
How do you avoid probate, yet put someone “in charge” of your assets upon death so they are distributed to members of your family, friends, and/or charities based on your wishes? Create a Trust!
A revocable living trust is a sound estate planning tool that can be used to determine who will get your assets when you die. Most living trusts are “revocable” because you can change them as your circumstances or wishes change. Revocable living trusts are “living” because you make them during your lifetime.
Trusts appoint one or more persons or companies to control and manage assets for the benefit of any number of people or charities. With a revocable living trust, the person or persons creating the trust are the sole beneficiaries during their lifetime and reserve the right to revoke or make changes. The person creating the trust usually chooses to also serve as their own Trustee and remain in charge while they are competent.
The most well-known advantage of a revocable trust is avoiding probate. Any assets properly held in the trust or transferred upon death to the trust will avoid probate and pass to the named beneficiaries as set out in the terms of the trust.
In addition, trusts are flexible and can contain unique distributions to beneficiaries. For example, you can hold money in a trust to be distributed over time. Some families prefer to have their adult beneficiaries receive only a portion of their inheritance at one time and wait to receive the remaining amounts at later dates in the future.
Although a revocable trust may be considered the principal document in an estate plan, a will should accompany a revocable living trust. This type of will, referred to as a “pour over” will, names the revocable living trust as the principal beneficiary. Thus, in the event it becomes necessary to probate any assets after your death (such as in the instance where something was not properly transferred to the trust), it would ultimately go back into the trust and still be distributed to (or held for the benefit of) the beneficiaries according to the trust instructions.
Revocable living trusts are complicated legal arrangements that require considerable knowledge and expertise and must be the product of a thorough analysis of your goals and objectives, and your personal and financial circumstances.