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A revocable living trust is an arrangement by which you as the grantor place property in trust and name yourself or some other person as Trustee or Co-Trustee, but reserve the right to revoke the trust so that the property can be returned to you. Generally, the trust agreement provides that upon your death the property will go to the named beneficiaries.
Why set up a revocable living trust? The advantages of the revocable living trust include the following:
(1) automatically avoids all probate of the property;
(2) avoids all legal fees and expenses associated with probate;
(3) provides for property management or disbursement;
(4) assures uninterrupted income and access to principal for family beneficiaries;
(5) avoids the emotional trauma, aggravation and frustration of a complicated probate court procedure;
(6) maintains privacy - nothing is printed in the newspaper as is the case when a person dies either in testate (no will) or with only a will;
(7) eliminates time delays in settling the estate - the successor trustee can immediately disburse the funds as indicated in the revocable living trust agreement;
(8) protects up to $1,500,000 from federal estate taxes for a single person and up to $3,000,000 for a married couple. This rule works for US citizens only!
And, what about the children? How mature and ready will they be to inherit my estate? Its true that age 18 is the legal minimum age for inheriting an estate, but is your 18-year old wise enough to manage substantial wealth? Maybe he should receive assets in stages (say, one-third at age 25, another third at age 30, and the remainder at age 35)? Shall he receive a big allowance, or should he be encouraged to get a job?
A great advantage of the revocable living trust is that you can decide and control how to distribute your estate to your children.
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