Cleveland Estate Planning and Trust Attorney Dan A. Baron Offers the Following on Revocable Living Trusts:
Revocable living trusts are used to control assets left to beneficiaries after the death of the creator. Unlike testamentary trusts which are funded after the death of the testator, revocable living trusts are funded during the trustmaker’s lifetime. Because living trusts are revocable, they do not offer creditor or litigation protection for the trustmaker. Instead, just like with a testamentary trust, the assets held in trust are protected for the trustmaker’s beneficiaries.
For example, let’s say Mom and Dad have children from a previous marriage. Dad dies leaving his two kids who are attending college. Before his death he set up a revocable living trust leaving the majority of the money to his current spouse but in addition left $100,000 for his children IF they attain a college degree. Here Dad is able to monetarily encourage his children to finish school even after he passes away.
The benefit of having the revocable living trust is that money left to beneficiaries is protected from creditors and litigation. Once the creator dies, the trust then becomes irrevocable and the wishes of the trustmaker can no longer be changed. In addition, because the trust is now irrevocable, the assets contained within the trust avoid probate and can be transferred immediately or at the discretion of the Trustee.
One disadvantage to revocable living trusts is that there is limited protection for the trustmaker. Because the trust is revocable before death, the trustmaker does not enjoy the same protections as his beneficiaries. For larger estates, the trustmaker might consider an Ohio Legacy Trust instead.
To learn more about revocable living trusts call Baron Law LLC today. You will speak directly with an attorney who can help answer your questions. Call today at 216-276-4282.