As you begin the estate planning process, you may want to consider including a revocable living trust in your estate plan. A revocable living trust is one of many tools you can use to distribute your assets among your beneficiaries.
There are generally three parties involved in a revocable living trust: the grantor, the trustee, and the beneficiary (or beneficiaries).
- Grantor – The person creating the trust
- Trustee – The person in charge of managing the trust (the grantor can serve as the trustee until their death, and name another person, or successor trustee, to take over as trustee upon the death of the grantor)
- Beneficiaries – The people who receive assets or income from the trust (the grantor can act as a beneficiary by taking income from the trust until they die).
In addition to naming a trustee and beneficiaries, you will need to decide which assets will be included in your trust. Generally, you will include your most valuable items, such as real estate, stocks, valuable art or antiques, and shares of a company. As trustee, you can add or take out property and put it in your name at any time.
Advantages to a revocable living trust
A revocable living trust offers many benefits to those who need a way to grant their family access to their assets after they pass away. Some of the advantages include:
- The ability to change and update the trust throughout your life (trust will become irrevocable upon your death).
- The ability to terminate the trust at any time
- Provides privacy to your surviving family members (no public record)
- Allows for the efficient transfer of assets to your beneficiaries when you pass away
- Allows your family to avoid the expensive and lengthy probate process
While there are many advantages to revocable living trusts, it is important to note that they may not be useful for all families. Under the Uniform Probate Code, there is a simplified probate process for New Jersey residents with smaller estates (valued at $20,000 or less). Revocable living trusts can be costly to set up. Therefore, families with smaller estates may not need a revocable living trust, as the probate process will be fairly quick and easy.
Setting up a revocable living trust is not always easy to do on your own. An estate planning attorney in the Millville area can help find the estate planning tools that work best for you and your beneficiaries.