Do you have a revocable living trust? Do you even know what it is? Here I am going to try to explain what it does and how important it is for you to create one. I think you will be pleasantly surprised by how much you will enjoy the peace of mind of knowing that your assets will be allocated exactly as you had planned. Furthermore, you can place conditions and rules about those assets that are in place long after you are gone.
A revocable living trust is just that, a trust document. It’s more of a series of documents that list all of your assets and how, when, and to whom they should be appropriated. This is beneficial for anyone that owns the property, equity in their home, rental property, investments, life insurance, a side hustle, crypto or stocks, or an IRA to name a few. You are the grantor of the trust. Your assets will be owned by your trust which is in your control and can be used by you throughout your life. This trust can be edited at any time throughout the grantor's lifetime. You can delegate another person to be the trustee in the event you become incapacitated to manage your affairs, but ultimately you have the final say over your assets and how they are dispersed. This can be reversed when you recover.
Even if you are single with no heirs, you need to leave instructions for your estate. Your assets still have to be dealt with. A revocable living trust helps keep your assets out of probate court. You have the added benefit that your provisions will not be eaten up by expensive lawyers or family and friends fighting over your assets. Most of all you can keep your decisions private. It’s simple and can be set up once you're done. It can be edited and updated as circumstances change over your lifetime.
Some things are also best left out of your trust. I have listed some items that may need to be handled another way due to triggering tax consequences at the time of transfer. These assets can be listed in the trust but handled by retitling them to the trust. This is tricky and should not be handled by someone that’s not qualified in understanding the tax implications and varying state laws. Qualified annuities such as 401K and IRAs, medical savings accounts, uniform gifts to minors, and insurance policies can create issues with taxes if not handled correctly. It is best to have a qualified estate planning attorney draw up your trust or you can do it yourself. You can put in your will that your assets are in the trust. I’ll leave a link below to a self-executed document that I would highly recommend getting notarized if you go this route. Also, I will add links for more information on this subject. Hopefully, this will give you another tool for handling your affairs. Don’t leave all that you have worked for up to the courts. Put your affairs in order before it’s too late.
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