Pieces of the puzzle: Revocable living trust


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In addition to safeguarding your wealth while you’re alive, you want to make sure it can be passed on to your loved ones after you’re gone. Many people accomplish this through the use of a revocable living trust as part of their estate plan. While a revocable living trust does not provide asset protection, it has other benefits and it still has a place within your overall asset protection plan (discussed below).

Like other trusts, a revocable living trust is an arrangement where you transfer property to a trustee to hold and manage for a beneficiary. It is “revocable” because it can be revoked prior to your death, and it is “living” because it takes effect while you are still alive. Typically, you are both the trustee and the beneficiary. This allows you to control and manage trust assets as you see fit.

If you die or become incapacitated, your successor trustee takes over the management of trust assets for you. Upon your death, it becomes an irrevocable trust (it cannot be changed). Your successor trustee would then distribute the remaining trust assets according to the terms of your trust.

Some of the benefits that come with a revocable living trust are the following:

  • Keeping your estate out of probate: Probate is the expensive and time consuming process where your affairs are wrapped up and your estate is administered through the probate court. Assets held in a living trust avoid probate altogether, sparing your loved ones a hassle during an already difficult time. Additionally, probate is part of the public record, so avoiding this process allows your family members to keep the administration of your estate private.
  • Flexible options for passing on your assets: If you die intestate or only have a will, you have far less control over how the assets are ultimately distributed. With a living trust, you can have your assets distributed over time, or even condition the distribution on meeting some milestone, such as getting married or graduating from college.
  • Preventing conservatorship: If you become incapacitated, you risk having a conservator appointed over your estate. This means someone else (maybe not the person you would choose) has control over your assets. However, if you have a living trust set up, your successor trustee can take over and manage your assets according to the terms of the trust.

A well drafted living trust is an important and flexible estate planning tool. It allows you to control your assets while you are alive, and gives you peace of mind that your loved ones will be able to enjoy the benefits when you’re gone.

Revocable living trusts and asset protection

As discussed above, a revocable living trust does not protect your assets. As trustee, you maintain control over the assets and can revoke or change the trust at any time. For this reason, the law treats the assets as owned by you and can therefore be reached by your creditors.

However, the living trust still has its place in an asset protection plan. For instance, if someone sets up a family limited partnership (i.e., the parents), they might have a living trust be the general partner. This way, if the parents die or become incapacitated, the successor trustee can easily take over management of the FLP with minimal disruption to the business.

Additionally, while a revocable living trust does not protect your assets, if drafted properly, it can help provide asset protection for your beneficiaries when it becomes irrevocable after your death.

An effective asset protection plan is a multilayered structure designed for your situation and goals, and flexible enough to adapt to changing life circumstances. Every tool should be considered, not only for its own strengths and weakness, but also for how it relates to other tools within the structure.

Sollertis can help with asset protection

The Sollertis Master Asset Protection Plan™ is the framework for protecting all of the individual assets that contribute to financial success.  Based on an analysis of your needs, each plan is a customized blueprint outlining the types and mix of legal structures needed to best meet your specific goals and objectives.

Once a MAPP™ is designed, you have a plan in place to protect your assets and to guide business, personal and investment decisions. Unlike traditional asset protection plans that take a “one-size-fits-all” approach, a MAPP™ adapts to changing circumstances. Whether implemented all at once or over time, you will create greater financial freedom knowing you’ve legally protected the wealth you have earned.

Contact us today to learn more about the Sollertis MAPP™ and our unique approach to managing all of your legal needs.


This material has been prepared by Sollertis for informational purposes only and nothing herein is intended as legal advice for any particular or individual situation. You should not rely upon any information herein as a source of legal advice, and receipt of any such information does not create an attorney-client relationship between you and Sollertis. Viewers and readers should not act upon this information without seeking professional legal counsel. Prior results do not guarantee a similar outcome.

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