Who Needs a Revocable Living Trust?Share this post
When revocable living trusts first became popular in the 1980s, most thought that they were only for the wealthy. Over time, trusts have become a popular planning tool for any size estate. Revocable living trusts are amazingly flexible legal tools that can help the creator of the trust—referred to in legal terms as the “trustmaker”, “grantor” or “settlor”—achieve a variety of goals and objectives.
For example, revocable living trusts may be used to avoid the probate process upon death. But to achieve that objective, the trust must be fully “funded” with your assets during lifetime, since assets left in your own name will most likely have to go through probate. As mentioned above, revocable living trusts can provide a set of instructions for taking care of you and your loved ones if you become disabled.
If you are married, the revocable living trust may provide for the creation of a marital trust and family trust upon the death of the first spouse. You’ll sometimes hear these referred to as “A and B Trusts.” These “subtrusts” are designed to both maximize a married couple’s total estate tax exemptions, and to protect the trust assets against the surviving spouse’s “creditors and predators”—which may include a new spouse should the surviving spouse remarry.
After both spouses have died, assets may be distributed to the couple’s children or other beneficiaries in a variety of ways—including
• immediate outright distributions,
• staggered distributions at various ages,
• lifetime trusts with liberal standards,
• lifetime trusts with conservative standards, or
• special needs trusts.
In summary, anyone who would like to accomplish any of these things in their estate plan would benefit from trust planning.