What Is it?
There are many different kinds of trusts. A revocable living trust is a legal document that places one’s assets in trust for their benefit during their lifetime, and spells out where they would like these things to go upon their death. Because it is revocable they can cancel or change it at any time during their lifetime. Living trusts are often used to:
Provide for a child with special needs
Help with a greater asset protection strategy
Do We Need It?
Maybe. Here are some rules of thumb. Get a trust if:
1. You have a family situation where someone might contest a will
2. The estate is worth over $5,450,000 (which makes it eligible for estate taxes in 2016 in USA)
3. You want to avoid probate
4. Real estate is owned in another state
5. You want to provide financial support for a child with special needs
6. You own valuable collectibles or precious metals
7. You own patents or coyprights
8. You own interest in a small business or partnership
Don’t need a trust if:
1. The person is middle-aged with insignificant assets
2. There are no children
3. The estate contains insignificant assets
4. You are married and all significant assets are jointly owned with spouse
How To Get It
1. A simple trust can be set up online, but it is best to talk to an attorney
2. After creating the trust, it needs to be filled with assets. Add these things:
- Real estate — house, condo or land
- Small business ownership interest
- Valuable collectibles - art, coins, antiques
- Patents or copyrights
- Precious metals
To add a house, for example, you need to transfer the property title into the name of the trust. Contact your city hall for help with this process.
Don’t add these things:
- Retirement accounts. They have their own beneficiary designation. Use it.
- Bank accounts. They have their own transfer-on-death designation. Use it.
- Mutual funds & brokerage accounts. In almost all states they now have their own transfer-on-death designation. Use it.
- Daily use automobile. You can add collectible cars, but it gets complicated and difficult for your daily auto for the trust to deal with insurance & registration.
- Life insurance (unless it is for the benefit of a minor child)