After discussing several estate-planning news stories and some complicated estate planning concepts, it's due time for a back-to-the-basics estate planning piece on this blog.
We've had several posts in the past discussing the basics of estate planning but it's an important topic to revisit. For instance, many people walk into the offices of a New York estate planning lawyer without much knowledge of what can be done with a revocable living trust. Here's a primer on revocable living trusts and why some are fifteen pages while others are fifty pages.
The revocable living trust is an essential estate planning document. Many estate planners will insist on drafting these as part of a comprehensive estate plan, whether you have thousands in assets, or millions.
This document can be anywhere from fifteen pages to fifty pages long. A revocable living trust is essentially an entity created to hold your property.
The property you transfer to the trust remains your property and you have full rights on it as trustee of your trust. But the key difference is that by placing your property in a revocable trust, you’re allowing it to pass probate-free to your heirs.
A simple revocable living trust will name the trustees (usually yourself and your spouse) and will name some successor trustees to manage the trust in the event that neither yourself or your spouse can serve as trustee. Usually, it will be the successor trustee who helps administer your trust once you pass away.
A more complicated revocable trust may have provisions inside of it, creating sub-trusts or other smaller trusts. Many times, a revocable trust will have a trust within it for the surviving spouse. Sometimes, the trust for the surviving spouse will become irrevocable on the death of the first spouse.
Other times, the revocable trust agreement might provide for trusts for the children or for the grandkids. These trusts may provide for income to be paid to the children, up until they reach a certain age.
Finally, a revocable trust might also contain provisions creating a special needs trust for a disabled beneficiary. This trust might be helpful if one of your children has special needs and will need to receive a stream of income, in addition to any state provided special assistance.
These are just a few of the tiny intricacies and nuances in the revocable living trust. Its an important document, so make sure its drafted carefully.
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