It’s not always something people enjoy thinking or talking about, but it is a conversation that must occur: what will happen to your estate when you pass away? It is not enough just to plan for your future. You need to plan for your childrens’ and loved ones’ futures as well. It is important that you take the necessary steps to ensure your wishes carry out when you are no longer around or otherwise in a condition where you cannot carry them out yourself. That is where estate planning comes into play. “What is a revocable living trust, then?” you may ask. A revocable living trust is an important part of the estate planning process that helps a person plan for both life and death in ways that a will typically cannot.
At Jones Legal, our Riverside estate planning and probate attorney Jennifer Jones has years of experience handling revocable living trusts as well as a number of other estate planning matters. We can help answer your questions such as: What is a revocable living trust? and more. To help you understand the big picture and plan your estate accordingly, trust the experience of Jones Legal law firm. Request your consultation by visiting our contact page or by calling 951-742-7213 today.
Revocable Trust Definition
You may hear a revocable trust also referred to as a living trust, hence the merging of the words “revocable living trust.” As the name implies, a revocable or living trust is created during your lifetime. The trust itself is a written document that lays out exactly how your assets will be distributed after your death. In this case, assets refer to any valuable possessions, bank accounts, real estate, or investments belonging to the creator of the trust. The creator of the trust may also be referred to as the trustor, grantor, or settlor of said trust.
The settlor of a revocable trust must name a trustee whose job will be to oversee the trust and manage the assets. This trustee can be (and often is) the settlor themselves, but can also be a trusted friend or loved one. Whoever is the trustee has a fiduciary responsibility to act in the settlor’s best interest. The settlor should also appoint a successor trustee in the event that the original trustee dies or otherwise becomes incapacitated.
How Does a Revocable Trust Work?
You may be thinking that a revocable living trust sounds quite similar to a will. After all, both documents essentially determine where or to whom a person’s assets will go following their death. The difference is that a trust goes into more depth, covering multiple stages of your life: when you’re alive, when you’re alive but incapacitated, and after you die. A will, on the other hand, only applies to after your death.
Then there are different kinds of trusts, such as an irrevocable trust. The difference between these is that a revocable trust is able to be modified or even voided at any point during the settlor’s life. Meanwhile, an irrevocable trust generally cannot be modified or terminated. To do so is very difficult. The moment a grantor signs the documents for an irrevocable trust, they remove any and all ownership rights to the assets named in the trust.
What are the Advantages of a Revocable Living Trust?
A revocable trust is one that often requires a considerable amount of effort to set up. However, the benefits of this type of trust typically outweigh any negatives, making the effort pay off in the long run.
There are a number of advantages that come along with a revocable living trust. Perhaps the most obvious advantage of a revocable trust is that it is, well, revocable. You can alter it at your own discretion in the case that circumstances or beneficiaries change. This flexibility makes revocable trusts ideal for someone who starts planning their estate at a younger age or someone who is unsure about who their beneficiaries should be.
Another benefit of this type of trust is that it avoids probate. When you pass away, your trustee is able to pass your assets directly to your beneficiaries without the court’s involvement, whereas with a will, your assets must go through court proceedings. These proceedings can often be long and costly before the distribution of assets can even take place.
Something that often turns people away from drafting a will is the knowledge that once they die, it will become public record. This means that anyone can see who their beneficiaries are, what each beneficiary is inheriting, and what stipulations are in the will. Trusts, on the other hand, provide protection and privacy for both the assets in the trust and its beneficiaries.
Finally, a revocable living trust tends to cost less time and money later on down the road. We’ll break down the cost of a revocable trust further below.
How Much Should a Revocable Living Trust Cost?
Revocable living trusts do tend to require more money and effort upfront than do other trusts or wills. However, the choice to draft a living trust now saves you the headache and cost associated with probate later on. In addition, these trusts tend to hold up better in the case that someone contests a provision, potentially saving even more time and expense in legal fees for lawyers or court proceedings that may be necessary with other types of wills or estate plans.
The exact price of a revocable living trust mostly depends on the value of the estate, the number of assets involved, and the complexity of the plan, among other considerations. However, whatever the cost, it is still just a fraction of the cost of probate. The cost of probate, on average, is at least 10 times more than the cost to set up a living trust.
To get the best estimate for how much your revocable trust may cost in the California Inland Empire, contact Jones Legal to arrange a consultation. During your consultation, your attorney will learn more about your individual circumstances and provide you with a more personalized estimate.
How To Set Up a Revocable Living Trust in California
There is quite a bit of effort that must go into the creation of a revocable living trust in California. The first thing you must determine is whether this is the right type of trust for you. Further, you must decide on a single or joint trust, meaning that shared property with a spouse becomes included in the trust.
Next, you’ll need to decide what assets will be going into the trust. You’ll need to gather the appropriate documents for these assets.
The next step would be to choose who will be your trustee. This is incredibly important, so you need to put a lot of thought and consideration into this aspect of the trust. This person will manage the assets and oversee the affairs within the trust. The trustee could either be you or someone you trust. However, if you choose yourself, you’ll need to name a successor. This is solely in the event that you become incapacitated or die and can no longer handle your own affairs. In addition to a trustee, you will need to determine who your beneficiaries are. Because it is revocable, you may make changes to this later on in case something changes down the road.
The next few steps mostly require the completion and submission of paperwork and documents. First, you must draw the actual trust document up. You must then ensure that it is complete and properly signed in the presence of a notary public. Finally, the transfer of property into your trust (aka “funding the trust”) must occur.
Your California revocable trust attorney can help you through this entire process. They will also ensure that all the proper paperwork gets signed and completed.
Contact Jones Legal Today to Get Started on Your Revocable Living Trust
While it is not impossible to draft your own trust, it can prove difficult and rather time-consuming. Without the knowledge and skill of a seasoned attorney, there are many mistakes that may occur during the process that could invalidate your trust. That is why it is so important that you obtain the legal assistance of someone with years of experience in this field.
At Jones Legal, our Riverside estate planning and probate attorney knows the ins and outs of a revocable living trust, and she can give you confidence that your best interests remain protected. Living trusts are not just for the wealthy, older crowd, either. Any and everyone has the ability to create a living trust—and they should—for the uncertainty that the future holds.