Your Guide to a Revocable Trust in Washington D.C.
You may be looking for effective ways to manage your property and assets during your lifetime and after your passing. Consider setting up a revocable trust. This legal instrument provides a legal framework for transferring your property into a trust, overseen by a trustee while allowing you to specify beneficiaries who will inherit these assets after your death. A trust offers you a lot of flexibility and control over your estate planning.
Kevin C. Martin, Attorney at Law, PLLC, is your trusted partner in Washington, D.C., ready to unravel the intricacies of revocable trusts and guide you through the journey of astute property management. Join us as we delve into the manifold benefits of revocable trusts and explore the peace of mind they can bring to your estate planning endeavors.
What is a Revocable Trust?
A revocable trust is a document in law that creates a trust entity to hold your assets. You can transfer anything into a trust, including the following:
Management of the Revocable Living Trust
You can appoint yourself as a trustee, meaning you control the management of the trust assets as you wish. Moreover, you can appoint a successor trustee who will take over management of the trust in case of your incapacity or death. Another significant benefit is you can name your beneficiaries and contingent beneficiaries if your primary named beneficiaries don’t survive you.
You may change or revoke revocable trusts anytime during your life. You may also add or remove property, change the trustees or beneficiaries, or cancel everything. The trust gives you flexibility and control over your estate planning. Your assets are still part of your taxable estate and are subject to estate tax.
Consider consulting an estate planning attorney for more information about your powers in revocable trusts.
Key Terms in Relation to a Revocable Trust
Probate: It is the process of settling your estate legally after you die. It’s all about validating your will (if you have one), settling your debts, and distributing what remains to your heirs. Settling your estate in probate court can be time-consuming, expensive, and public.
Grantor: A grantor is the person who creates the trust and transfers assets and property into it.
Trustee: The person or entity managing the trust assets on the beneficiaries’ behalf. The trustee has to act in the interests of the beneficiaries and adhere to the trust document.
Beneficiary: The person receiving the trust’s benefits. The beneficiary can be a person, a charity, or another trust.
Purpose of a Revocable Trust
Primarily, a revocable trust helps you avoid the intricacies of probate. When you transfer your property into a trust, you effectively remove it from your probate estate. It means that when you pass on, your trustee can distribute the trust assets without the pain, cost, and publicity of probate.
Secondly, a revocable trust covers your bases in case of incapacity. If you cannot manage your affairs, a successor trustee can take care of your trust assets. The trustee eliminates the need for a court-appointed guardian or conservator, which can be intrusive and expensive.
Benefits of a Revocable Living Trust
- Avoids Probate: You can avoid probate by privately transferring assets to beneficiaries after death, preventing a public record. This may help bypass probate’s requirements and expenses when the process is correctly set up and maintained.
- Provides for Incapacity: You can appoint someone to oversee your assets during your lifetime if desired.
- Control Over Distributions: Your revocable living trust gives you control over your trust assets. You can specify the conditions, such as age or education requirements, for the beneficiaries to receive their shares. You can also protect the trust assets from the beneficiaries’ creditors, spouses, or lawsuits.
- Flexibility: You can change or revoke it anytime during your lifetime.
Revocable v. Irrevocable Living Trusts
The difference between the revocable and irrevocable trusts is in the names. Once created, you cannot change or revoke an irrevocable living trust. You lose control and ownership of your property when you transfer it into an irrevocable living trust.
But still, irrevocable trusts can be advantageous as they can reduce your estate taxes and protect your property from creditors in certain cases. As you give up ownership of your property and assets, they may no longer form a part of your taxable estate.
Which Is Better: Revocable or Irrevocable Trusts?
Your personal goals, preferences, and situation determine the type of trust you need. Generally, you may prefer a revocable living trust to avoid probate, provide for incapacity, and retain control and flexibility over your property. But if you seek to reduce estate taxes and protect your assets from creditors, you’ll prefer an irrevocable trust.
Do you need help deciding between setting up a revocable and irrevocable trust? Consider contacting a DC trusts lawyer for guidance.
How to Set Up a Revocable Trust
You may follow the steps enumerated below to set up a revocable living trust:
Step 1: Create a Trust Document
The trust document is a legal instrument that creates a trust and specifies its terms and conditions. Consider working with an estate attorney to protect your rights and interests. Your trust document will have the following information:
Your name (grantor) and trustee (you or someone else).
The name of a successor trustee. A successor trustee takes over trust management in case of incapacity or death.
Your beneficiaries’ names.
Terms/instructions of the trust.
Provisions of how you can change or revoke the trust.
Step 2: Notarize the Trust
Next, you sign the trust document and get it notarized to make it official.
Step 3: Fund the Trust
Funding your trust means transferring property and assets into the trust. You fund your trust by changing ownership of your property to the name of your trust. Properties and assets that can fund a trust include real estate, bank accounts, stocks, bonds, jewelry, etc.
How a DC Trusts Lawyer Can Help You
While setting up a trust is a great way to manage your property, it involves following all the requirements and formalities to create a valid and effective trust. When so much is at stake, a trusted estate planning attorney can help you. At Kevin C. Martin Attorney at Law, PLLC, we can help you with the following:
- Draft a comprehensive trust document reflecting your wishes and goals.
- Advise you on funding your trust with property and assets.
- Review and update your current will and other estate planning documents to coordinate with your revocable trust.
- Help you change or revoke your revocable trust if needed.
- Assist you with any issues or disputes regarding your revocable trust.
If you want to set up a revocable trust or have questions, please get in touch with us today. We have experience in setting up different estate planning tools. We can help create a revocable trust that reflects your needs and protects your family.
Ready to get started? Contact us to schedule a free consultation. Kevin C. Martin, Attorney at Law, PLLC, can discuss the benefits of a revocable trust with you and help you manage your property.