What is a Revocable Trust and Do I Need One?
A well-written and fully funded revocable trust allows your beneficiaries to avoid probate while giving you control over your assets during your lifetime and managing their use and distribution after you die.
While you are alive and have the mental ability to manage your affairs, your trust is completely subject to your control. After you become incapacitated, and when you die, your trust becomes irrevocable, and its terms are enforceable much like those of a will. But because it is a private legal agreement, its administration is private, and not subject to the public process that governs estates where there is only a will, or where there has been no estate planning at all. This keeps your beneficiaries out of court and makes it possible for your wishes to be honored quickly and privately, ordinarily within days or weeks, instead of years after your death.
What Is a Revocable Living Trust?
A revocable living trust is a legally enforceable agreement you make with yourself, or together with your spouse, which you, or both of you, can change or revoke (eliminate) during your lifetime. The simplest way to think of it might be to imagine that it is a vessel or a vehicle that provides a convenient place to keep your assets, which you manage within the trust as your own trustee. You get to pick your successor trustee, who will manage those assets in the trust when you are no longer able, whether because of your eventual infirmity or death.
Once you are no longer able to manage your trust (as your trustee) the terms of the trust become irrevocable. This is what makes the trust powerful, and in some cases vital.
Avoiding the Probate Process with a Revocable Trust Probate is the process by which the court transfers the ownership of a dead person’s assets to a living person or other legal entity, such as a charity.
A trust, as pointed out previously, doesn’t die. It’s a legal entity, not a natural person. But it can own property (sort of like a corporation or a limited liability company, or LLC can), and it can, by its own terms, dictate what happens to that property at your death, and it can do that without having to be subject to the court in a probate process.
But the assets changing hands, or changing beneficial ownership, through a trust must be owned by the trust. That is what “funding a trust” means. A trust is funded when the property you own is transferred to the trust’s ownership, either while you are still alive, or automatically at your death by virtue of a beneficiary designation, or a “pay on death” or “transfer on death” designation, for assets that have such an option.
Contact the Virginia Trust Attorneys at Commonwealth Life & Legacy Counsel
The experienced trust attorneys at Commonwealth Life & Legacy Counsel have helped clients with estate planning and elder law in Virginia for nearly ten years. Schedule your free consultation and discuss whether a revocable trust is a good fit for you.