Establishing a revocable living trust is just one estate planning strategy for protecting your family after you pass. A trust is revocable if you can alter or cancel it after it has been created. You would devise such a trust if you wanted to maintain control over your assets while you are still alive. If you wish, you may even reclaim assets you have placed into the trust.
Unlike an irrevocable trust, a revocable trust does not have its own tax ID number. Instead, the revocable trust shares a Social Security number with the grantor, who continues to file trust taxes using Form 1040 as if they retained personal ownership of the assets.
How Do You Create a Revocable Living Trust?
There are two main steps to creating a revocable living trust. First, your attorney will help you prepare a trust agreement, or a “declaration of trust,” which is a legally binding document you and the trustee must sign. Then, you will transfer property to the trustee, who will hold it on behalf of the beneficiaries you name.
Do I Need a Will If I Have a Revocable Trust?
A revocable trust is one way to distribute assets to beneficiaries, but when it comes to estate administration, a trust should not take the place of a will. Even if you establish a trust, you still need to draft a will as part of your estate planning documents. That way, you can cover all bases and take care of your family after you pass.
If you want to draft a will or create a revocable trust, turn to an estate planning attorney at Drake Law Firm PA in Mountain Home, AR. Check out their website to learn how they can help with trust administration and call (870) 425-2460 to schedule an initial consultation today.