Revocable Living Trust
The Revocable Living Trust is both a life-planning and death-planning document. It allows for probate avoidance, one of its greatest benefits, but also provides for asset management if you become disabled. This Trust allows for asset management while at the same time providing flexibility for the changes in your life as time progresses.
One of the biggest benefits is the ability to maximize your estate tax savings. This Trust allows the owner to maximize his/her estate tax credit which, for a married couple, thereby reduces estate taxes paid at the death of the spouse.
Unlike an Irrevocable Trust, the Revocable Trust can be changed at any time. The assets can be put in or taken out at any time by the Grantor. The downside is that the Grantor still “owns” the assets which makes them reachable for Medicaid and creditor purposes. The Trust will take title to many of your assets, including bank accounts, life insurance, brokerage accounts, CD’s, and real estate. It can also be the beneficiary of life insurance and even IRAs or other qualified assets.
As a tool to reduce post-death costs, the Revocable Trust will avoid probate and the cost and delay caused by the court system. It will allow for a quick, efficient transfer of your assets to your benefits.
The trust is an alternative to transferring real estate to children to protect it. Transferring real estate to children can be problematic if the parent ever wishes to sell, or if any of the children die before the parent, get divorced or file bankruptcy. Using the trust avoids all of these problems. If someone owns real estate in multiple states, trusts can provide extensive savings on probate in other states. In fact, using a trust when someone owns property in multiple states will actually cost much less in the long run than using a Will.
BENEFICIARY OF IRA'S
As a beneficiary of an IRA, the trust will pass the pre-tax dollars to the trust beneficiaries (usually children) over a ten year period to the beneficiaries. The trust can, however, pass those benefits to children over their respective lives as well. The trust has the added benefit of protecting IRA assets for these children who are disabled and for whom the IRA would disqualify governmental benefits. Furthermore, should a child die before the IRA is fully distributed, the IRA will pass to those people of the Grantor’s choosing, likely the grandchildren, rather than the in-laws.
PROTECTION FOR CHILDREN
The trust provides that your assets will pass to children and stay in the bloodline. If a child dies before the parent, the trust helps prevent the diversion of family assets to spouses, in-laws or unrelated persons, thereby protecting the grandchildren’s inheritance. The trust also protects your children’s inheritance from divorce, rights of election, creditors and the nursing home.
For those who have young children, children who are spendthrifts, drug-addicted children, disabled children, or children with other problems, the Trust, or even a well drafted Will, can provide protection for them. We recommend withholding inheritances from children until at least 25 years old. The law provides that an 18 year old will receive their inheritance unless a trust is created for them. More often than not, a child at 18 will not know what to do with their money and will squander it. The goal is to make sure that these young adults are protected until they are old enough to properly manage the money.
It’s time to start planning for your future and the future of your children. Although you can’t predict the future, you can prepare for it by estate planning from Hilton Estate & Elder Law, LLC. Call today for a FREE initial consultation.
Are your children, your spouse and your possessions protected if you were to suddenly be gone? No matter how old you are it is never too late to start estate planning and make sure that you and your family are protected.
Material presented on the Hilton Estate & Elder Law, LLC website is intended for information only. It is not intended as professional advice and should not be construed as such.
The material presented on this site is included with the understanding and agreement that Hilton Estate & Elder Law, LLC is not engaged in rendering legal or other professional services by posting said material.
The services of a competent professional should be sought if legal or other expert assistance is required.
Any unauthorized use of material contained herein is at the user’s own risk. Transmission of the information and material herein is not intended to create, and receipt does not constitute, an agreement to create an attorney-client relationship with Hilton Estate & Elder Law, LLC or any member thereof.
This website is not intended to be advertising and Hilton Estate & Elder Law, LLC does not wish anyone desiring representation based upon viewing this website in any state or jurisdiction where this website fails to comply with all laws and ethical rules.
This website is not intended to constitute legal advice or the provision of legal services. By posting and/or maintaining this website and its contents, Hilton Estate & Elder Law, LLC does not intend to solicit legal business from clients located in states or jurisdictions where Hilton Estate & Elder Law, LLC or its individual attorneys are not licensed or authorized to practice law.
Some links within this website may lead to other sites. Hilton Estate & Elder Law, LLC does not necessarily sponsor, endorse or otherwise approve of the materials appearing in such sites.