A living trust is a trust that is established during the creator's lifetime, which might be a revocable trust, an irrevocable trust, charitable trust, or special needs trust.
Revocable trusts are the most popular kind of living trust, and therefore many people will use "living trust" to mean revocable trust (or a revocable living trust) even though a "living trust" could technically encompass many other trusts.
What is a revocable living trust?
A revocable living trust is a will substitute that efficiently transfers assets upon death.
Unlike a last will which takes effect only after death, a revocable living trust becomes effective immediately after proper execution and funding, which is the process of transferring ownership of assets to the trust.
The most popular benefit of revocable living trusts is that they avoid probate. Avoiding probate tends to reduce the cost of estate administration and keep matters of the estate private, since the probate process creates a public record of the last will and its contents.
| Last Will | Revocable Living Trust | |
|---|---|---|
| Can be modified or cancelled after creation | ✔ | ✔ |
| Avoids probate | ✔ | |
| Maintains privacy | ✔ | |
| Significant control over gift distributions | ✔ | |
| Avoids guardianship | ✔ |
Additionally, revocable living trusts offer greater ability to set controls and requirements around gift distributions to beneficiaries. For example, you can specify in your revocable living trust that a beneficiary receive distributions only after attaining a certain age or upon completion of college.
Lastly, revocable living trusts avoid guardianship. If you have a funded revocable living trust and become unable to manage your own affairs, your co-trustee or successor trustee steps in to manage the trust property. The court does not need to initiate a guardianship proceeding to figure out who will manage your property, because you’ve already made your designation through the revocable living trust.
How do I make a revocable living trust?
You can create a revocable living trust by yourself, with the help of an estate planning attorney, or through a digital service like Just In Case Estates.
Most people do not need an estate planning attorney to create their revocable living trust or other estate plan. For this vast majority of Americans, digital services providing legally valid, state-specific revocable living trusts like Just In Case Estates offer great value to create and manage your revocable living trust.
You can learn more here about revocable living trusts, or get started on yours today with Just In Case Estates. Most Just In Case Estates members complete their trust documents in 15 to 20 minutes.
