Creating a Revocable Living Trust
I’VE HEARD THAT EVERYONE SHOULD HAVE A WILL. DOES MY LIVING TRUST REPLACE A WILL?
HOW LONG DOES IT TAKE TO SET UP A REVOCABLE LIVING TRUST?
Typically, it takes about 2 to 3 weeks after the initial consultation to prepare the trust documents. After the trust documents are signed, it is necessary to complete the funding documents that are used to transfer ownership of the assets to the trustee of the trust. This process can take from a few days to several months, depending on the number and types of assets. These time frames can be shortened greatly if an emergency situation exits.
WHEN DOES MY LIVING TRUST BECOME EFFECTIVE?
A revocable living trust document and all the ancillary documents created as part of a living trust-centered plan become effective when they are properly signed. In order to receive the greatest benefit from a revocable living trust, however, you must retitle your assets in the name of the trustee. (Technically, title is changed to the name of your trustee, rather than the trust itself; but this is a technicality we at Resch, Root & Philipps, LLC can help you with.) If you do not accomplish this, any assets not placed in the trust prior to your death may have to go through the probate process before coming under the control of the trust.
WILL I HAVE TO RECORD MY TRUST AT THE COURTHOUSE?
A few states require that you record a memorandum of trust or an affidavit of trust when you convey real property to your trust. Such an affidavit or memorandum sets forth certain facts about your trust. For example, you would state the name of the trust, who the current and future trustees are, and some of the powers of the trustees with respect to assets owned by the trust. Ordinarily, you would not disclose the beneficiaries of the trust, the portion of the trust property which has been designated for each of the various beneficiaries, or the provisions for distributing the trust property.
I DON’T WANT ANYONE TO KNOW I HAVE A TRUST. HOW DO I KEEP MY TRUST CONFIDENTIAL?
In certain jurisdictions where the recording authorities require that the trust document be recorded, or in the case where you do not want anyone to know that you have a living trust, you can use an additional document called a nominee partnership to keep your trust confidential. It acts as an agent for your trust, thereby keeping your trust confidential as an undisclosed principal.
IF THE TRUST PAPERS ARE NOT FILED IN THE COURTHOUSE OR OTHER PLACES OF PUBLIC RECORD, HOW ARE THEY RECOGNIZED AS LEGAL DOCUMENTS?
WHAT IS LIFE LIKE AFTER I PUT ALL MY ASSETS INTO A REVOCABLE LIVING TRUST?
Life goes on just as it did before. It’s kind of like putting all your assets into a big box with no lid on it. You can put property in and take it out anytime you want. You have complete control. Unlike you or I, the box doesn’t die or become disabled, so court involvement is not needed to carry on your affairs after disability or death. At death, the lid goes on the box and the trust becomes irrevocable.
IF I AM TRUSTEE OF MY REVOCABLE TRUST, DO I HAVE TO HAVE A SEPARATE TAXPAYER IDENTIFICATION NUMBER AND FILE A SEPARATE TAX RETURN FOR THE TRUST?
HOW LONG IS THE LIFE OF MY TRUST?
CAN I CHANGE MY TRUST PROVISIONS LATER ON?
Because your trust is revocable, it is a very flexible estate planning device. You may revoke, change, or amend your trust document at any time you wish during your lifetime without penalty.