Estate Planning as a Career

Most people looking to make long-term plans have heard about revocable living trusts, but very few people actually understand what they are.

A Revocable Living Trust is a legal document that includes instructions regarding what should be done with your assets when you die. Now, you may be thinking — isn’t that what a Will does? Yes, that’s exactly what a Will does; however, the key difference between a Will and a Trust is that a Trust prevents the assets in the Trust from being probated (tied up in the court system) at your death — a Will doesn’t.

Revocable Living Trusts are not the only way to avoid probate. Jointly titling your assets or designating beneficiary designations are two other commonly-used methods of avoiding probate. While joint ownership and/or beneficiary designations may be appropriate in certain cases, there are other situations where having your assets in a Trust is the best course of action.

Trusts are not nearly as complicated as many people believe them to be. The first step is to meet with an attorney who is experienced in drafting Revocable Living Trusts and who can explain the process to you. You will become the Grantor of the Trust — meaning the

Trust belongs to you and only you can make changes to your Trust. You will also need to name someone as Trustee to manage the assets in your Trust. You can be your own Trustee or designate someone else (a family member, friend, or corporate trustee like a bank) to serve as Trustee. Finally, you will designate beneficiaries—people or organizations who will receive your assets when you die.

This is where a Trust is extremely useful. For example, you may have three adult children and you may want all of your assets to pass in equal shares to the three kids upon your death, and should one of your children die before you do, you want his share to go to (more…)