Your Guide To Making Your Own Living Trust

It’s never pleasant to think about what might happens when somebody dies or can no longer take care of themselves. But eventually it’s crucial to ensure a person’s assets are safeguarded from taxation.

When you do decide to move forward with the creation of a living trust, one of the key things to determine is if you will go with a revocable or irrevocable living trust.

Here’s breakdown of what a revocable living trust is and the pros and cons of that particular form of trust.

Tip No.1: How Revocable Trusts Work

There are two basic kinds of living trusts: revocable and irrevocable. A revocable trust is simply one where the person who creates the trust-commonly known as the trustor or grantor-can change or revoke any part of the trust during their lifetime.

Revocable trusts still require a trustee, usually a member of the family, who by law can supervise the assets in the estate while the trustor is alive. (They can also manage personal affairs of the trustor in the case of incapacitation.)

The distinction here is that the trustee cannot use the assets for any personal use without written permission to do so from the trust like they can in an irrevocable living trust.

Tip No.2: Advantages of a Revocable Trust

For most folks, a living trust is far better than a will, in that it can allow a trustor to be very clear about their desires when it comes to divying up the assets of the trust.

Another key advantage of a revocable living trust is the ability of the trustee to handle the trustor’s affairs if they become sick or disabled.

What separates the revocable version is how much less paperwork is involved in its creation, as opposed to an irrevocable trust.

Tip No.3: Revocable Trust Drawbacks

However, due to its revocable nature these kinds of trust aren’t seen as iron-clad by the IRS. What’s that mean? Income stemming from the trust is taxable.

In addition, a revocable trust will not save you on probate fees. Flexibility, it seems, comes at a cost.

That being said, there’s a ton of great info out there to help you in building your trust. Accessing that info will save you on skyrocketing lawyer fees and unnecessary estate taxes.

Want to find out more about how to make your own living trust, then visit http://make-your-own-living-trust.com/ for more info on how to get the info you need to save money–and get peace of mind.

Published by: Max Hammerstein on May 28th, 2010 | Filed under Legal



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