Revocable living trusts (also known as revocable trusts or living trusts) are often used as an estate planning tool to help individuals manage their assets during their lifetime and after their death. The main benefit of a revocable living trust is that it allows the individual creating the trust (the grantor) to retain control over the assets placed in the trust while also providing a way to transfer those assets to their intended beneficiaries.
Here are some ways in which revocable living trusts are commonly used in North Carolina and South Carolina:
- Avoiding probate: Assets held in a revocable trust can pass directly to the designated beneficiaries upon the grantor’s death, without going through probate. Probate is a legal process in which a court oversees the distribution of a deceased person’s assets, and it can be time-consuming and expensive. By avoiding probate, a revocable trust can help ensure that the beneficiaries receive their inheritance more quickly and with less cost.
- Providing for incapacity: A revocable trust can also be used to provide for the grantor’s care and management of assets in the event of their incapacity. If the grantor becomes unable to manage their own affairs, the designated trustee of the revocable living trust can step in and manage the trust assets for the grantor’s benefit.
- Maintaining privacy: Because a revocable trust does not go through probate, its terms are generally private and not a matter of public record. This can be useful for individuals who prefer to keep their financial affairs discrete. This can also be useful if a grantor’s beneficiaries have financial troubles, are going through a divorce, or have substance abuse issues.
- Managing assets for minor or disabled beneficiaries: A revocable trust can be used to manage assets on behalf of minor or disabled beneficiaries. The trust can provide instructions for the distribution of the assets over time or in specific circumstances, ensuring that the assets are used appropriately for the beneficiary’s needs.
- Providing for blended families: A revocable trust can be useful for individuals with blended families who want to ensure that their assets are distributed according to their wishes. The trust can provide for the surviving spouse while also ensuring that the assets ultimately pass to the intended beneficiaries, such as children from a previous marriage.
It’s important to note that a revocable living trust is not a one-size-fits-all estate planning solution, and it may not be the best option for everyone. The team at Perrin Legal can help you determine whether a revocable living trust is the right choice for your particular circumstances.
Charlotte-based attorney Christian Perrin is a North Carolina Bar Board Certified Specialist in Estate Planning and Probate Law. Based in Charlotte, Christian and his team serve clients throughout North Carolina and South Carolina.
Disclaimer: This information is intended to stimulate thought and discussion and to provide readers with useful ideas in the area of estate planning. However, this information does not constitute and should not be treated as legal advice or tax advice regarding the use of any particular estate planning technique, device or suggestion. Our law firm does not assume any responsibility for any individual’s reliance on the information presented. Each reader should verify independently all statements made before applying them to a particular fact pattern and should determine independently the legal and tax and other consequences of using any particular device, technique or suggestion.