A Revocable Living Trust is a document that is created by the Trustor (the person who made the Trust) to hold and own all the Trustor’s assets, which are used for the benefit of the Trustor by the Trustee(s) of the Trust. The Trustor maintain control of the assets within the Trust. As the name implies, the Trustor has the right to change or revoke this type of Trust throughout their life. A Revocable Trust does not reduce estate taxes. An Irrevocable Trust can be used to reduce estate taxes. A Revocable Living Trust has various uses at different stages in the Trustor’s life.
What happens to a Trust while the Trustor is healthy?
While the Trustor is alive and healthy the Revocable Living Trust has provisions for the Trustor to use and benefit from the assets held in the Trust. The Trust allows the maker of the Trust to also be a Trustee of the trust and enjoy the assets held in the Trust.
What happens to a Trust when the Trustor is incapacitated?
The Revocable Living Trust also holds provisions for what should happen if the Trustor becomes mentally incapacitated or incompetent. Some of the provisions include who will manage the Trust and make sure all the bills of the Trustor are paid.
What happens to a Trust when the Trustor dies?
When the Trustor of a Revocable Living Trust dies, the Trust Administration stage begins. The Trustee of the Trust will then pay all the final liabilities, debts, bills and taxes of the Trustor. The Trust also stipulates who receive the assets held within the Trust without having to go through probate and can be kept completely confidential as it is not overseen by the court system. The Trustee will administer the assets from the Trust according to the terms of the Trust.
Does a Revocable Living Trust have to go through probate?
A Revocable Living Trust can completely avoid probate. Once assets have been transferred into a Revocable Living Trust, they no longer belong to the Trustor, instead, these assets now belong to the Trustee of the Trust. Again, the Trustor can also be named as a Trustee for use during their lifetime and have others named as Trustees after their death. Since the assets do not belong to the Trustor, when the Trustor dies, they immediately skip probate and stay with the Trustee(s) of the Trust.
Do I need a trust?
You don’t necessarily need a Trust. Each individual needs to decide what they are trying to accomplish with their estate planning goals. Trusts provide three main advantages:
- 1 Privacy
- 2 Future Mental Disability
- 3 Probate Avoidance
One of the main advantages of creating a Revocable Living Trust is privacy. Probate is a court-supervised process, meaning all documents become part of public record for anyone to see. A Trust can often be seen as a private contract between the Trustor and Trustee, keeping both the assets and the information regarding the assets confidential.
2. Future Mental Disability
A Revocable Living Trust can include determining metal disability and contingency plans for you and your assets in the event of incapacity. Many Revocable Living Trusts do not include mental disability planning as part of the Trust. When you meet with attorney Gregory S. Smith, be sure to request mental disability planning in your Trust if you feel this would be of benefit.
3. Probate Avoidance
Probate is for all assets that are not currently in a Trust. Even if you have created a Trust, the only assets that are protected by the Trust are those assets which have been transferred to the Trust, all other assets are subject to probate. Simply put, if the assets belong to the Trust, then the assets are probably safe from probate.
Can a Will Offer Any of the Trust Benefits?
No, a Will is public record through the public court system, therefore offers no privacy. A Will only dictates the wishes of the deceased, so a Will cannot cover mental incapacity. All assets that are in the name of the person who died are required to go to probate, the court makes sure that these assets of the deceased are properly administered with or without a Will.
Nevada Revocable Living Trust Lawyer
Meeting with estate planning attorney Gregory S. Smith will help you determine the best estate plan that is right for your needs to meet your estate planning goals. Smith & Shapiro is open Monday – Friday, 8:00am – 5:00pm. Please call 702-318-5033 or fill out our online contact form above to schedule an appointment.