A revocable living trust agreement is a legal document that allows individuals to transfer ownership of their assets into a trust, while still maintaining control of those assets during their lifetime. The main advantage of a revocable living trust agreement is that it allows individuals to avoid probate, which is the legal process of settling an estate after someone passes away.
Unlike a will, which only comes into effect after someone passes away, a revocable living trust agreement can be effective immediately upon its creation. This means that the trust can hold and manage assets during the grantor`s lifetime, and can be amended or revoked at any time.
A revocable living trust agreement typically includes several key elements, including the following:
Trustee: The trustee is the person or entity responsible for managing the trust and its assets. The grantor of the trust can serve as the initial trustee, and can appoint a successor trustee to take over management of the trust in the event of their death or incapacity.
Beneficiaries: The beneficiaries of the trust are the individuals or entities who will receive the trust`s assets after the grantor`s death. The grantor can designate one or more beneficiaries, and can change the beneficiaries at any time.
Assets: The assets held in the trust can include real estate, investments, and other property. The grantor can add or remove assets from the trust at any time.
Distribution instructions: The trust document should include instructions for how the trust`s assets should be distributed after the grantor`s death. For example, the assets can be distributed to the beneficiaries outright, or they can be held in trust and distributed over time.
Tax implications: A revocable living trust agreement has no tax implications during the grantor`s lifetime, as the grantor retains ownership and control of the assets in the trust. However, after the grantor`s death, the trust assets may be subject to estate taxes.
Overall, a revocable living trust agreement can be a valuable estate planning tool for individuals who want to avoid probate and maintain control over their assets during their lifetime. It is important to work with an experienced estate planning attorney to create a trust document that meets your specific needs and goals.