Last updated on October 31st, 2018
Forming a Revocable Trust
A revocable living trust is a trust that takes effect during your lifetime. You are able to change, revoke, or terminate the trust at any time during your life.
The establishment of a revocable living trust exempts your estate from state probate procedures, allowing you to designate or change your beneficiaries at any time. Your revocable living trust is a document that is written to consider the property included as “trust property.”
You must list the property to be included, your designated trustee, and your beneficiaries in your trust documents. Once your trust is organized, you must sign the trust document and have it notarized.
Generally, you retain trusteeship over the trust property until death, at which time the position is granted to your named trustee. Your revocable living trust becomes irrevocable upon death.
Transferring Property into a Revocable Trust
As stated, you must list the property you wish to be covered by your trust in the trust documents.
When you include untitled property, simply list the items in detail.
When you include titled property, such as a home or car, you must change title ownership over to the trust in order for that property to be transferred.
Once your property is transferred, the trust acts as a legal entity holding ownership of your trust’s property.
Failing to transfer title ownership of property named in the trust risks that portion of your estate becoming eligible for probate instead of flowing through your trust as you intend.
Changing Your Revocable Trust
Your trust – along with the rest of your estate plans – is a document that must be kept up-to-date. Any considerable changes, such as the birth of a child or relocating, are major changes that effect your estate plans.
Making changes to your revocable trust involves drafting an amendment to be added to your trust documents. If you are changing a clause of your revocable trust, state that the previous clause is revoked, and include your newly amended clause in its place.
You are not required to rewrite your trust in order to make an amendment. Unless your estate plan requires extensive changes due to your present circumstances, amendments are preferred.
Adding Property to a Revocable Trust
Adding property to your revocable trust is similar to amending the terms of your trust. Untitled property is added to your trust by amending the list of trust property to include in your acquired property. Titled property is added to your trust by transferring title ownership of the property to the trust, and including that property in your list of trust property.
Remember, any estate property that is not sufficiently covered by the trust, or title property that is not fully transferred to the ownership of the trust, is not protected by the trust.
Therefore, that property is subject to probate and possible intestate succession.
Hiring a lawyer to form your revocable living trust is not required, but is recommended. Drafting estate documents is careful work that must be executed with precision in order to protect your estate. Therefore, it is highly recommended for you to consult an attorney before establishing your estate plans.
Schedule a consultation with our estate planning attorney in order to discuss your revocable living trust options.