A Revocable Living Trust is a legal document that allows the grantor (the person who creates the trust) to take personal assets and transfer them to the ownership of the trust during his or her lifetime. While the trust technically owns the assets, the grantor can continue to use them as he or she normally would.

Generally, it is a good idea to place as many assets as possible into the trust to maximize its benefits. However, certain assets, such as life insurance and Individual Retirement Accounts, are not eligible for transfer into the Revocable Living Trust. The trust controls the assets during the grantor’s lifetime and distributes them to named beneficiaries after death.

When a Revocable Living Trust is established, the grantor names a trustee to manage the assets in the trust during the grantor’s lifetime. Most grantors name themselves as trustee, giving them complete control over the trust’s assets. Typically, a successor trustee is also named to take over management of the trust and distribute trust assets after the grantor passes away. The grantor can specify when heirs will receive their inheritances from the trust. This can prevent an heir from squandering an inheritance if he or she is not yet mature enough to manage money on his or her own.

The benefits of a Revocable Living Trust include:

• The grantor can make changes to the trust after it is set up. (An Irrevocable Living Trust, on the other hand, generally cannot be altered once it is created and provides less freedom to the grantor.)
• Avoiding probate, which can be an expensive, time-consuming, and frustrating process. In addition, heirs cannot receive their inheritances until the probate process has been completed, which can take many months. Probate is also a public process, so anyone can learn about the decedent’s debts, creditors, financial situation, and more.
• Protecting the grantor and the grantor’s family from a stressful and expensive guardianship proceeding.
• Ensuring assets are managed according to the grantor’s wishes even after the grantor passes away.

It is important to note that Revocable Living Trusts must be properly "funded" to accomplish their goals. Let’s take a closer look at trust funding.

What Is Trust Funding And Why Is It Essential?

What do we mean by the term "funding" a Revocable Living Trust? Essentially, it involves retitling your assets into the name of the trust, as well as making sure that the beneficiaries of any life insurance policies or retirement accounts coincide with the provisions of the trust. If you fail to fund your Revocable Living Trust, your estate plan won’t work as you intended.

The consequences of not properly funding your trust include:

• Assets held outside the trust cannot be managed by the trustee. So, for example, if you become mentally incapacitated, your loved ones will need to establish a court-supervised guardianship or conservatorship to manage the assets not held in the trust
• Assets held outside the trust are subject to probate, defeating one of the main benefits of creating the trust in the first place
• Assets held outside the trust may not go to your intended beneficiaries

The bottom line is this: Make sure your Revocable Living Trust is properly funded. And, be sure to keep it up to date so that any changes in your personal and financial situation, together with those of your loved ones, can be taken into account. In this way you can be sure your Revocable Living Trust is helping you to accomplish all of your goals and maintain complete control over your affairs.

Pets Are More Popular Than Ever.
A Pet Trust Could Help Protect Yours.

For many of us, the pandemic and social distancing have led to a greater sense of isolation and feelings of loneliness. That void is increasingly being filled by companion animals, particularly dogs. According to a recent article in the Washington Post, what began in mid-March as a sudden surge in demand for rescue dogs has turned into a bona fide frenzy. Shelters, nonprofit rescues, private breeders, and pet stores have all reported greater demand for puppies and adult dogs. In fact, the demand cannot be met, and some breeders have extensive waiting lists well into 2021.

We love our dogs, now more than ever. But what happens if a beloved canine companion survives his or her owner. Who will care for your dog (or cat) if you pass away first? A pet trust could provide the answer.

The main objective of a pet trust is to provide a flexible method of managing financial assets for the benefit of any pets that survive you. With a properly designed pet trust, you can designate a party to act as “caretaker” for your dog or cat.