Revocable living trusts are estate planning documents that can give the grantor (the person for whom the trust is created) complete control over his or her assets during life, in the event of in capacity, and after death.
Unlike a will, a revocable living trust is a legal entity that can own property. The grantor retitles assets into the trust (a process known as funding) but retains control over them, typically by naming himself or herself as trustee. A successor trustee is generally named as well. The successor trustee is responsible for carrying out the mandates of the trust if the grantor becomes incapacitated and after the grantor passes away.
Revocable living trusts have several important advantages over wills, including:
The grantor’s estate can be settled without the delays and expense of Maryland probate.
When a will is probated, anyone can see the grantor’s debts, creditors, and other financial information. A revocable living trust ensures privacy.
The grantor can continue to manage the assets in the trust, or even terminate the trust at anytime (hence the term “revocable”).
Asset Protection for Beneficiaries
A revocable living trust does not protect the grantor’s assets against threats like long-term care costs, divorce, lawsuits, and more. (An irrevocable trust can accomplish these asset protection goals.) However, the grantor can protect assets for the beneficiaries and specify when and how assets will be distributed to them. This is important in situations where a beneficiary is not yet capable of managing an inheritance on his or her own.
In addition, a revocable living trust can provide for management of the grantor’s assets in the event of incapacity, thereby avoiding the prospect of a stressful and protracted Maryland conservatorship proceeding.
It is worth noting that a revocable living trust does not eliminate the need for a will. In fact, are vocable living trust should always be prepared along with what is called a pour-over will. The pour-over will dictates that assets not pre-funded into the trust will be “poured” into the trust upon the grantor’s death, ensuring such assets do not have to go through probate.
Is a revocable living trust right for you and your family? Find out by calling the Law Offices of Clifford M. Cohen at (202) 895-2799 to schedule a meeting. We can meet in-person at our office or virtually via Zoom and other platforms.