With the help of our network of US Estate Attorneys, we will help our clients establish a Revocable Living Trust, a Will and Powers of Attorney for your US situs assets. A revocable living trust is a trust document created by an individual that can be changed over time. It is used to avoid probate and to protect the privacy of the trust owner and beneficiaries of the trust as well as minimize estate taxes.
The trust is established by a written agreement or declaration that appoints a trustee to manage and administer the property of the grantor. As long as you’re a competent adult, you can establish an RLT. As the grantor, or creator of the trust, you can name any competent adult as your trustee; some people prefer to choose a bank or a trust company to fill this role. You, as the grantor can also act as trustee throughout your lifetime. Once it’s set up, you begin by placing your assets—including investments, bank accounts, and real estate—into the trust. At this point you no longer own those assets; they belong to the trust. And because your assets belong to the trust, they do not have to go through the probate process upon your death. (In essence, the trust is like a rule book for how your assets are to be handled when you die.) However, as this is a revocable living trust, you retain control of the assets, even though they no longer belong to you, while you’re alive. You can amend or change the trust at any time. Income earned by the trust’s assets goes to you and is taxable; but the assets themselves do not transfer from the trust to your beneficiaries until your demise.
Once you create the trust, your work isn’t done. Most people need to monitor it on an annual basis and make adjustments as needed (trusts do not adapt automatically to changed circumstances, such as divorce or the birth of a child). You should consider the added inconvenience of making sure that future assets are continuously registered to the trust and providing other professionals with access to the trust documents to review trustee powers and duties. Once the trust is established, property must be re-titled in the name of the trust. This requires additional time, and sometimes fees apply to processing title changes. Please note that revocable living trusts offer very little asset protection if you retain an ownership interest, such as naming yourself as trustee.