Estate Planning: Revocable Living Trusts vs. Wills - Part One

What is a Revocable Living Trust?

The American Bar Association (ABA) website states… “The term ‘living trust’ is generally used to describe a trust that you create during your lifetime. A living trust can help you manage your assets or protect you should you become ill, disabled or simply challenged by the symptoms of aging.” It should be noted here that a “Revocable Living Trust” is also known as a “Living Trust,” and I will use the terms interchangeably.

The ABA website goes on to state that… “A ‘living trust’ is legally in existence during your lifetime, has a trustee who currently serves, and owns property which (generally) you have transferred to it during your lifetime. While you are living, the trustee (who may be you, although a co-trustee might also be named along with you) is generally responsible for managing the property as you direct for your benefit. Upon your death, the trustee is generally directed to either distribute the trust property to your beneficiaries, or to continue to hold it and manage it for the benefit of your beneficiaries.”

Put more simply, as we often explain to our clients, a Living Trust is like having a bucket with instructions slapped on it. You can put assets in the bucket and take them out. The instructions state for whose benefit the assets can be used and how they can be used if you become incapacitated or die. You can change the instructions during your lifetime so long as you have capacity to do so.

That being stated, there may be some bells and whistles that can provide additional flexibility to the creator of the trust beyond what has been reviewed thus far, but the foregoing general descriptions are a good starting point for understanding the concept of what constitutes a Living Trust.

If you or anyone you know has any other questions regarding Living Trusts or Wills, please don’t hesitate to reach out to us. We are happy to be a resource to you. We can be reached at (203) 651-5521.