Busy already in the day-to-day, it can feel like there is no time to set aside for planning on behalf of our loved ones and charitable causes. With the help of an experienced California estate planning attorney, however, estate planning does not have to be overly complex or time-consuming. An attorney can help you select the estate planning tools that are best for your assets and intentions. One such tool is the revocable living trust. This article will introduce Californians to the benefits of this type of trust.
Estate planning is a part of wills and trusts law. In this field of law words carry especially deep significance. Accordingly, to understand the nature and function of a revocable living trust, one must understand the words “revocable,” “living,” and “trust.”
“Revocable” means capable of being canceled or changed. This word and its definition speak to something about the greater picture of what a revocable living trust is – that it is something in effect while its creator is still alive. This feature is unique because some estate planning instruments, such as wills, only take effect upon the death of the grantor (the founder, or creator, of the trust). So, at this stage, we know that a revocable living trust is something that can be canceled (revoked) and operates while the grantor is still living.
The last word in the series of three,“trust,” is most important and far-ranging. A “trust” is at its roots a relationship between three people: the grantor, the beneficiary, and the trustee. In this relationship, the grantor gives property (e.g. money, real estate, personal property) to the trustee (a trusted friend or relative, frequently) to manage and hold in trust for the benefit of the beneficiary. The terms of the management of the trust property can vary. Sometimes, once the trust is created, the terms are set in stone. Other times, even once the trust has come into existence, the terms can be changed by the grantor. It is this flexibility that makes the trust “revocable.”
Now that you understand the nature of a revocable living trust, it is time to understand the function of the instrument. The reason revocable living trusts are a popular estate planning instrument in the state of California is because they help individuals maintain control over their assets while they are still living and dictate how they are distributed at death. Such control and management allows for a revocable living trust to substitute for a will. In addition, a revocable living trust is capable of reducing taxes and other costs associated with the management and distribution of one’s estate. Finally, revocability is akin to flexibility. Being able to change the trust’s terms allows one to more easily adjust to major life events such as marriage, divorce, and children. If a revocable living trust sounds like it might be a wise estate planning instrument for you, reach out to a skilled and experienced California trusts attorney.