What is a revocable living trust?
A revocable living trust is a trust which you create during your lifetime and which may be revoked at any time prior to your death. During your lifetime you act as the "trustee" of the trust which holds title to real or personal property transferred to the trust while you retain full management and control over it. As the "settlor", or creator of the trust, you retain the beneficial interest in the trust assets and receive all income generated by the assets as a trust "beneficiary."
What happens to my estate upon my death?
After your death, your "successor trustee" administers the trust and distributes its income and principal to those persons that you designate as beneficiaries at such time or upon the occurrence of such events as you provide in the trust declaration. One of the benefits of a living trust is that the assets placed in the trust are not subject to a probate of your estate; however, if you have assets which, at the time of your death, have not been placed into trust, those assets can still be placed into your trust through the operation of a "pour-over will" following the probate of your estate. You may also wish to consult your certified public accountant or tax advisor concerning the potential tax advantages of creating a revocable living trust.
What other issues should I Consider regarding Estate Planning?
As a part of your estate plan, you should consider creating "durable powers of attorney" for health care decisions and dealing with non-trust property. A durable power of attorney (unlike a general or special power of attorney) will survive your incapacity and should you be unable to make decisions affecting your health care or property, would permit your "attorney-in-fact" to make those decisions in your stead premised upon the guidelines you provide in the durable power of attorney.
What documents are involved in a "typical" estate planning package?
A typical "estate planning package" might include (1) a revocable living trust; (2) a pour-over will; (3) durable powers of attorney; and (4) such documents as may be required to transfer designated property to the trust (i.e., deeds for trust real property). ! The cost of creating an estate planning package varies depending upon the complexity of its provisions. A trust may be considered more complex when created by husband and wife settlors, particularly in larger estates where tax planning objectives are considered. Simple estate planning arrangements where the principal objective is to avoid a probate of your estate can be created for as little as $400.00 to $500.00. The cost of more complex arrangements will vary with your individual circumstances and objectives.