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5 Tips for Creating a Revocable Living Trust

Last updated on: May 17, 2021

A revocable living trust can be a helpful estate planning tool if used properly. These “living trusts” can help your family avoid the costly and time-consuming probate process and save you money in estate taxes as well. By creating a living trust, you can often lessen the burden on your loved ones after you are gone.

Not all living trusts are created equal. You should use the following tips to help you create a living trust that will work well for your unique situation:

  1.     Put out-of-state assets in your trust.

If you own property in more than one state, putting it in your revocable trust can help your family avoid having to open an estate in several states. You can save your family hundreds or even thousands of dollars simply by moving your out-of-state property into the trust. It will also be processed much faster after you pass.

  1.     Choose a successor trustee carefully.

While you are alive, you will serve as the trustee of your own trust. That way, you retain complete control over your assets. After you pass, someone that you name (aka the successor trustee) will distribute and manage the trust assets in a way that you specifically designate. You should take some time to think about whom you trust to take on this important role. It should be someone who is responsible enough to carry out your wishes.

  1.     Create an incapacity clause.

You can actually use your living trust as a way to avoid having to set up a separate guardianship or conservatorship in some circumstances. You simply indicate that your successor trustee will also take over should you become incapacitated and set out specific rules or conditions on your care should that event occur. The team at Matus Law Group can help you incorporate this lesser-known feature into your trust.

  1.     Avoiding putting unnecessary assets in the trust.

Many life insurance policies, bank accounts, and retirement accounts have a payable on death provision, and they automatically go to your beneficiaries upon your death. As a result, there is no need to go through the time and effort of moving these assets into your trust. However, if, for example, the beneficiary is a minor or otherwise incapacitated, you can set up the trust as the recipient so that the assets will be administered through the trust for the benefit of the “true” beneficiary in the specific way that you describe.

  1.     Take advantage of increased FDIC protection.

The average bank account receives up to $250,000 in protection from the FDIC related to losses. For some, that amount may not be enough. When you have a trust, however, you have $250,000 of FDIC protection for each beneficiary (up to a certain limitation). It may be worth adding beneficiaries to take advantage of this extra protection.

Revocable living trusts have a number of unique and beneficial features. The Matus Law Group can walk you through which features will help you and your family the most. Call today for more information!

Christine Matus

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Christine Matus

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