Are you looking to create an estate plan and are considering a revocable living trust? It is important to know the answers to these 3 questions before you move forward with your estate planning lawyer.
Will Assets Be Frozen With A Revocable Living Trust?
One of the problems with a will is that any assets that are in your name are frozen after you pass away. Your family then have to go through the probate process in order to legitimize your will, deal with debts, liquidate assets, and distribute what is left. When you have a revocable living trust, none of the assets or accounts that belong in the trust will be frozen. This allows people that will inherit the assets of the revocable living trust to get access to the items immediately.
Who Are The Trustee And Beneficiaries?
One of the differences between a will and a revocable living trust is that there is no executor with a trust. There will be a trustee instead, who is the person that dictates who receives the assets after you pass away. Anyone that receives assets is considered a beneficiary. You are allowed to make changes to the trustee and beneficiaries in a revocable living trust at any time, which makes this sort of trust very appealing. You can also assign multiple people to be the trustees after you pass away.
The benefit of a revocable living trust is that there is no court involvement after you pass away. While there is more work involved to set up the revocable living trust, there is less work involved to divide the assets when the time comes.
How Are Taxes Different With A Revocable Living Trust?
Many people are worried about what kind of estate taxes will need to be paid after they pass away, and they also want to find ways to limit those estate taxes so that their beneficiaries get more of an inheritance. You need to be aware that the limits on how much an estate must be worth before it is taxed is very high. The current limit is $11.4 million, and it will be roughly cut in half by 2026. Many people have estates so small that they will never even come close to having to pay estate taxes.
If your estate does qualify for estate taxes, you likely have plenty of questions about how to reduce your tax liability. Work with an estate planning lawyer to take the necessary steps to reduce your potential tax burden. Contact a law firm like the Skeen Law Offices to learn more.
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