Revocable living trusts are a popular estate planning tool that allows the creators to control their assets now while preparing for smooth transitions in the future. If prepared correctly, a revocable or “living” trust could accomplish many goals.
Those interested in creating or changing a Naperville revocable living trust are advised to consult an experienced trusts lawyer for guidance. If legal requirements for the trust are not met, the trust may be considered invalid.
There are many reasons why revocable living trusts have become so prevalent in recent years. First, when a revocable living trust is prepared, and assets are transferred in accordance with legal requirements, the creator’s assets may be distributed directly to beneficiaries without the need to go through the lengthy and complex probate procedures. This could save a lot of money and headaches for family members.
In addition to avoiding probate hassles, revocable living trusts allow beneficiaries in Naperville to access assets immediately, avoiding the long delays that can occur when an estate is tied up in probate. A revocable living trust could also allow family members to control assets if the grantor becomes incapacitated without the need for a complex guardianship proceeding.
A trust is a legal entity created by trust documents. As an entity, a trust may own property, including real estate and bank accounts. The person who creates a trust is often called the grantor because they grant their property to the trust. A trust holds and manages property for the benefit of a beneficiary, and the assets of the trust are managed by the trustee.
In traditional trust situations, the grantor, trustee, and beneficiary are three separate individuals. In a revocable living trust in Naperville, these roles are usually held by the same person.
In operation, the grantor executes documents to create a living trust and transfers their assets into that trust. The grantor, also serving as the trustee, continues to manage those assets and to receive the benefits of ownership, because that person is also the beneficiary of the trust. Daily transactions remain virtually unchanged.
When the grantor passes away, the successor beneficiaries gain access to the trust’s assets without legal action. If the person who created the trust becomes incapacitated, the trust allows a successor trustee to manage the trust assets for the benefit of the grantor. Thus, a revocable living trust could avoid the expense and delay of both probate and guardianship proceedings.
A revocable living trust may be structured to allow successor beneficiaries immediate access to assets, or to allow the successor trustee to manage the assets and defer distribution until the beneficiaries reach an age when they are able to manage property on their own. The trustee may be granted discretion to distribute amounts earlier if the trustee believes it would serve a beneficiary’s best interests.
A Naperville revocable living trust remains revocable, meaning the terms can be changed or the trust may be terminated at any time in accordance with the grantor’s wishes. Therefore, these types of trusts do not carry many of the risks inherent in establishing an irrevocable trust.
Those interested in learning more about how a revocable living trust could benefit their situation should consult a trusts and estates attorney. If a trust is not properly created or assets are not transferred correctly, the trust is unlikely to accomplish its intended purposes.
