A revocable living trust is a very effective estate planning tool that is preferred by most people over a last will and testament. A revocable living trust gives you an orderly way to distribute your assets upon your death with privacy during the process. Also, a revocable living trust allows someone you choose to manage your assets for you if you become sick or mentally incompetent.
Additional Reasons to Have a Revocable Living Trust:
Without a trust, a court will have to appoint a conservator to manage your child's inheritance until he or she reaches the age of 18. Additionally, most parents do not think age 18 is an appropriate age to receive a full inheritance. Through a trust, the court is not involved. Most importantly, you choose a trustee who is responsible for managing the inheritance over a period of time and according to the instructions you set forth in the trust.
Flexibility of Distribution of Assets to Multiple Beneficiaries
The revocable living trust can be amended an unlimited number of times. When your life and assets change, so can your trust. Distributions can be made to family, friends and charities in the amounts you choose and at the time you choose. Trust assets can be specifically designated to other beneficiaries if a named beneficiary dies.
Creditor Protection for Beneficiaries
With a properly drafted trust, a beneficiary's inheritance can be protected from his or her creditors, a divorce, from a pending lawsuit and if the beneficiary dies before receiving his or her share, then protected from his or her estate's creditors.
Assets in Multiple States
Without a revocable living trust, real estate in another state will be subject to a separate probate process. This will result in unnecessary difficulty and additional cost and time.
Planning for Future Health Concerns
In the event you become mentally incapacitated or too ill to manage your financial affairs, your successor trustee may take over for you without court involvement. Also, with proper Medicaid planning, you may be able to preserve some of your estate for your children or heirs while also being eligible for Medicaid. See Medicaid Planning.
Estate Planning – Last Will & Testament
Estate Planning – Michigan Lady Bird Deed