For many people, the idea of creating an estate plan and managing assets through a trust can be very intimidating. Properly managing your estate can result in numerous benefits for you and your loved ones, but only when everything is executed properly. You capital and wealth are finite in nature, making it very valuable to properly plan and prepare for the best outcome with limited resources. It can help to find experienced, certified estate lawyers in Maryland to help you with the planning and execution of your plan. Our estate planning attorneys in Bethesda and Washington, D.C. are here and ready to help you plan for the road ahead. Since 2000, our team of experts have worked to provide the best tax, business, and estate law services. From tax advice to civil litigation, JDKatz is here every step of the way to help create the best outcome for your unique situation.
Estate planning is often very complex and can include numerous tasks to ensure a proper outcome. One helpful tool that can help you avoid the wills and probate process is a living trust. Today, we’ll discuss what a revocable living trust is and how it can help you save a lot of time and costs. When you are finished, be sure to contact our estate experts for assistance in planning for your family’s future!
What is a Revocable Living Trust?
Often referred to as a living trust, this entity is made with the purpose of securing an individual’s assets in the event of death or incapacitation. The person who creates this trust is titled as the grantor and trustee, giving them the ability to manage and control all of the assets within that trust for their own benefit until they pass away. Any competent adult can create an RLT, and most do so to keep control of their assets while alive. An irrevocable trust, on the other hand, removes your ability to control the assets once they are placed. Once it leaves your hands, you have no say in its use and handling. A living trust is often used as a convenient substitute for a will, where your assets are distributed per your wishes in a similar fashion. However, RLTs are able to execute the distribution of trust assets in a way that is much quicker and less costly. When an individual passes away with a will, their estate will go through the probate process to ensure compliance.
Benefiting from a Living Trust
- Protection. Life happens, and if something happened that made you unable to competently make decisions, your entire estate can be at risk. RLTs are helpful in creating a plan that can benefit you now while also providing support for your beneficiaries.
- Hands-on management. RLTs allow you to manage your assets throughout life, giving you the ability to plan for the future as you see fit. Many individuals have benefitted from hiring a trustee to look after their affairs. This appointment is helpful for ensuring continuity in the use and appropriation of your assets. Your living trust is comprised of your regulations, and you have the ability to set regulations and instructions for all of your beneficiaries.
- Privacy. When an estate goes to the courts, every aspect of that estate will be open to the public. Living trusts aim to avoid this by taking care of all distributions without the need to go on public record. This benefit alone is enough for many individuals to contact their estate planning attorney.
- FDIC-insured. The Federal Deposit Insurance Corporation can protect up to $250,000 per account for American citizens. Many indivviduals place more money in the bank, raising the risk of losing their finances in case something goes awry. Living trust offer an additional $250,000 in coverage for each beneficiary. If you appoint five beneficiaries, your trust will be protected up to $1,250,000.
- Minimized estate challenges. Relying on a will for the distribution of your estate will require it to go through the probate process. During this period, individuals have the legal ability to refute the validity of your will. While this is often not successful against citizens with a well-maintained estate plan, the possibility arises that your will may be invalidated after your death. A revocable living trust, on the other hand, is much harder to discredit, as your continual involvement in financial dealings with this entity show that you are invested in the running of your estate.
- Reduced estate taxes. Revocable trusts are not meant to serve as a tool for tax minimization, yet they can can prove very helpful in designating where your assets go in order to minimize your tax responsibility. Many individuals establish a credit tax shelter to assist in mitigating tax liabilities. When your assets exceed tax exclusion amounts, it pays to have a properly executed estate plan.
- Lower trustee fees. When a loved one serves as the executor of your will or a trustee for your trust, they often do not seek financial compensation. Professional help, on the other hand, is based on a percentage basis for maintaining and enforcing your wishes. In many cases, professional representatives take at least five percent of the assets for pay, utilizing a tier system that reduces the percentage as the estate amounts increase. Fees for trustees, on the other hand, tend to stay around one percent.
There are many benefits you can utilize when starting a revocable living trust. It’s important to remember that this system may not be the best for your unique situation. Next time, we’ll continue on this topic by discussing a few important details to remember about RLTs, as well as the benefit of working with professional estate attorneys through the process.
JDKatz is proud to serve as your professional help when it comes to revocable living trusts in the Bethesda area. Our team of knowledgeable estate lawyers in Maryland have the skills and resources to provide guidance and support every step of the way. By working closely with you to develop a personalized plan for your needs and goals, we’re able to deliver top-tier services to create optimal outcomes for your situation. Contact us today to learn more about our estate planning services.