Estate planning is critical to making sure hard-earned wealth does not diminish. The financial wellness of offspring may hang in the balance.
A revocable living trust is one tool that estate planners often use in conjunction with a will. These documents keep inheritances from passing through probate, a lengthy and costly process. Avoiding common oversights with these alterable documents improves their effectiveness.
Asset identification
Forgetting to include certain valuables sometimes happens when writing a revocable living trust. For instance, a vacation home might escape attention. After death, that property would then be subject to the whims of a probate judge. Avoid this from happening by periodically revisiting your assets.
Trustee selection
Naming someone to control a revocable living trust remains a vital decision. This person will have power over many financial matters and bear crucial responsibilities. Instead of choosing a friend or family member, consider a corporate trustee, such as a bank.
Creditor protection
Since these trusts are revocable, creditors can make seizures to pay off debts. Some structures keep assets out of their hands. Verify that yours forbids outside elements from intruding on your wishes.
Tax considerations
As a general rule, revocable trusts face taxation after the passing of the trust owner. Thus, it may be best to create an irrevocable trust in conjunction with a revocable living trust.
Charitable inclusions
You might want to factor nonprofits into your estate plan. Make sure the causes that matter most to you receive a donation.
These concerns play a role in every revocable living trust. Check that nothing falls through the cracks when assembling yours.