Well-drafted and properly planned, a revocable living trust can be an extremely effective estate planning tool. Trusts – which include both revocable and irrevocable trusts – are called “living” when they are created within the trust maker’s lifetime. Revocable trusts are distinguishable from irrevocable trusts because the maker (also known as the “grantor”) of a revocable trust expressly reserves the right to change or revoke the trust. The person appointed to oversee the trust is known as a “trustee”, and in a revocable trust the trust maker and trustee are typically the same person (or, in the case of a married couple, co-grantors and co-trustees). The trust’s beneficiaries are the individuals who benefit from the income generated by the trust. In many revocable trusts, the maker names himself or herself, along with any children, as beneficiaries. It is possible, and quite common, for a trust grantor to name himself as both trustee and beneficiary.
Does a Revocable Trust Take the Place of a Will?
No. Although a revocable living trust is generally the central document in an estate plan, it does not replace a last will and testament. Without a will in place, the decedent’s assets are distributed according to Missouri descent and distribution law – and this may not necessarily be how the deceased would have wished his property distributed. Furthermore, any assets purchased after the trust was created – or assets that, for whatever reason, were never titled in the name of the trust – must pass through the probate court. An experienced estate planning attorney can create a “pour over will”, which, by naming the trust as the individual’s beneficiary in his will, “pours” all of a decedent’s assets into his existing trust upon death. Finally, individuals with minor children can use their will to create a guardianship for their children in the event they die while their children are still minors – something a trust can’t do.
What Are the Advantages of a Revocable Trust?
Revocable trusts offer numerous advantages. Properly funded, a revocable trust can avoid probate altogether, reducing administration costs and allowing beneficiaries to receive their distributions more quickly. Unlike probate, a trust is also largely a private matter, with few, if any, public records to divulge a beneficiary’s assets or personal information.
Springfield, Missouri Estate Planning Attorneys
At the Law Office of Randy L. Smith, LLC, our attorneys help individuals and families create estate plans that preserve their legacies, conserve their assets, and secure their financial future. Call us today at (417) 841-2775 to speak to an attorney about your estate planning needs.
This website has been prepared by The Law Office of Randy L. Smith, LLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.