A revocable living trust can protect assets for you and your loved ones.

Selecting the right tool for a task is critical.

Although one could eat chili with a fork, a spoon is superior.

Both deliver food to the mouth, but one would be more efficient given the circumstances.

Similarly, estate planning documents should be selected based on the situation of the individual needing the plan.

According to a recent The Times article titled “An important part of protecting your assets and those you love,” a revocable living trust (RLT) can prove beneficial when a family or individual needs are greater than what is afforded in a last will and testament.

Asset distribution and estate settlement is often faster with a living trust.

What is a RLT?

It is a legal entity for the holding and transferring of real estate and other property and assets during the incapacity and after the death of the trust maker.

Real estate can be especially challenging for executors and heirs to manage in probate after the death of the owner.

A RLT simplifies the distribution process.

Assets held within the RLT will either be used for the benefit of or transferred to the beneficiaries according to the terms outlined in the trust document.

Unlike with a last will and testament, the RLT assets will not be subject to probate proceedings.

This is good news if a RLT has been funded.

One can fund the RLT using real estate, jewelry, vehicles, bank accounts, investments, or other personal property.

Who manages the RLT?

Management is provided by the designated trustee.

The owner and creator of the RLT typically serves as the trustee while alive.

Some individuals typically even choose to make their spouse their co-trustee.

Your RLT should include a successor trustee to take over should you or your spouse become disabled or die.

This person or corporate fiduciary will be responsible for managing the assets and making appropriate distributions while you are incapacitate and after your death.

What are the top reasons for creating a RLT?

Probate can take a long time, depending on the degree of organization and documentation you leave regarding the assets in your estate.

Throughout these proceedings, a building or home will still need to be maintained with taxes and insurance paid.

Any updates to the property or even renting the property will likely require approval from the courts.

Repairs can be expensive and urgent.

If the estate is still in probate, someone will need to ensure repairs are completed and pay for them accordingly.

Although some assets like retirement accounts, life insurance proceeds, and Pay on Death (POD) bank accounts are distributed directly to beneficiaries listed on these assets, personal property and the home must pass through probate if there is no surviving joint owner or no funded RLT exists.

This can take months or years, depending on the estate size and complexities.

As with a "testamentary trust" created under a last will, with a RLT you can designate more than simply who inherits.

You can choose when and how they receive their inheritances.

Distributions can be made over decades and can be connected to the achievement of certain goals.

While a last will and testament is only effective after the death of the testator, the RLT is operational while the trustmaker (also known as a grantor, settlor, or trustor) is still alive.

A last will only controls those assets subject to probate.

These includes when a spouse is not a joint owner and when a beneficiary designation was incomplete.

A last will must be submitted to the probate court as public record.

This means anyone could view your document.

If privacy is important to you, a RLT provides this.

Because a RLT is not necessary for everyone, discuss your situation with an experienced estate planning attorney.

Reference: The Times (Oct. 29, 2021) “An important part of protecting your assets and those you love”