Revocable Living Trusts may hold assets during your lifetime so that you or someone else can manage them. Revocable Living Trusts have Settlors (who set up the trust), Trustees (who manage it) and beneficiaries (who receive benefits from it). These Trusts are often set up by Settlors (husband and wife) for themselves while they are living. The Settlors’ assets must be re-titled in the name of the Trust. Revocable Living Trusts may be revoked or cancelled by the Settlors at any time. The Settlors may also be the Trustees and the primary beneficiaries while alive. There will usually be contingent Trustees named to manage the Trust and secondary beneficiaries to receive the benefits after both of the Settlors have passed away.
Revocable Living Trusts have many uses, but they are not for everyone. There are many factors to consider in determining if Revocable Living Trust are appropriate, such as the type of assets you own, your ability to handle financial matters and your family situation. For example, if you own real estate or time shares in another state or if one spouse is much better at handling financial matters, such as stocks and bonds, than the other, a Revocable Living Trust may be helpful.
However, Revocable Living Trusts will not usually save taxes, whether these taxes are inheritance taxes, federal estate taxes or income taxes. There are also costs involved to set up Revocable Living Trusts since assets will have to be re-titled into the name of the trust. Sometimes, having a Revocable Living Trust may even complicate the administration of your estate, especially if not all of your assets are titled in the name of the trust.
Whether Revocable Living Trusts are appropriate for your family are questions best answered by an experienced elder law attorney. It is best to avoid fast talking salespeople who are selling Revocable Living Trusts door-to-door or following your attendance at a “free seminar” or lunch.