The legal profession is one of the few areas where Latin remains in popular use. Part of the reason for this is historical, since the law relies heavily on precedent. Latin terms, like “inter vivos trust,” connect old and new cases.
An inter vivos trust is now more commonly called a living trust. It serves a few important estate planning purposes. If you want to provide for loved ones before your death, a living trust offers a way to do so. Depending on your financial picture and family needs, it can be an important part of your estate plan.
What is a Revocable Living Trust?
A revocable living trust is something you create during your lifetime for one or more beneficiaries. These may be your children, but can be anyone you designate. Instead of holding your assets until after your death, you place them in a trust. You decide who receives the benefit, as well as how much, how often, and for how long.
Many people create a revocable living trust when they have minor children and want to provide them a safety net. If you create an inter vivos trust, you can set it up to begin paying your children at adulthood, after college, or at any other time. When creating the document, you’ll name a trustee to manage the accounts and create a payment schedule. It can provide a steady income over time or a lump sum for the beneficiaries to manage.
One of the benefits of a revocable living trust is that it avoids probate. On the other hand, assets included in a will pass through probate, which can take months before they’re available to your grieving loved ones. If someone contests your will, it may take even longer.
A key part of the name is “revocable.” When you set up a revocable inter vivos trust, you can choose to end it and reclaim or redistribute the funds. You need to follow a legal process to do so, but unlike an irrevocable trust, this allows you to adjust your plan if your situation changes.
Trusts vs. Wills
Whether you want to use a revocable living trust, an irrevocable trust, or a will for your estate plan depends on a number of factors. Although there are inexpensive online DIY options, the best way to determine the right documents for your situation is to work with an attorney who has experience creating a variety of estate plans. Like any legally binding document, the wording in the papers is crucial, and mistakes or omissions can have a lasting impact on your family.
Your Estate Planning Strategy
Choosing your documents isn’t just a matter of crunching numbers. You should look at your individual family needs and circumstances. An experienced estate planning attorney can help you determine what documents will work best for you.
Of course, creating a revocable living trust or a will is not an either/or choice. A comprehensive estate plan may include both. It’s not as simple as picking and choosing documents and considering your estate plan complete. Work with an attorney known for understanding the legal process as well as the complexities of the decision-making process. After all, estate planning can be very emotional as you consider your assets, your loved ones, and your mortality.
If you’re ready to create a revocable living trust, contact Ogborne Law today.
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