Creating a Revocable Living Trust for Minor Children
Many people feel that creating an estate plan is an activity for the wealthy. However, if you have any assets, you should consider how you will leave them to your beneficiaries after you die. While many people are familiar with a Last Will and Testament (will), some people are unsure how revocable living trusts operate, or when they are useful. Visiting with an experienced estate planning attorney can help you determine which option is the best for your situation. In the meantime, learn how creating a revocable living trust for minor children can help you ensure that your beneficiaries receive the assets that are a result of your hard work.
Revocable Living Trust
A revocable living trust is also known as a revocable trust. This legal document, similar to a will, determines how certain estate assets are distributed upon a person’s death. Things included to be distributed are bank accounts, real estate, and valuable personal possessions and investments. A revocable living trust allows you to revoke it (hence the name) during your lifetime. You will appoint a trustee, who will administer the trust, handle tax returns, handle all income and assets.
When a person has only a will, they must go through the probate process. This is a legal process and can ultimately cost between 5-10% of the assets of the trust. A revocable living trust is different than a will as it does not require the probate process. If all assets are correctly titled in the name of the revocable living trust while the person is alive, the transition is smooth, and also private, unlike the probate process.
A revocable living trust provides a great deal of flexibility, specifically with provisions for minor children. A revocable living trust allows a person, during their lifetime, to transfer assets to their minor children. Also, a person can determine exactly when and how much is given to each child. A minor child’s estate will never include any assets that are in the revocable living trust which eliminates some estate taxes. Being able to create an estate plan that affords you flexibility within your lifetime, as well as after you die, is beneficial for not only taxes but peace of mind.
Contact an Experienced Estate Planning Attorney
A revocable living trust is oftentimes a better legal tool than a will in certain cases. Creating a revocable living trust can allow you to provide financially for your minor children even during your lifetime. However, there are circumstances where trusts are not always the best option or should be used in conjunction with a will. Trusts cost money to maintain, and include their own separate tax consequences, needing to file a separate tax return. The estate planning landscape can be challenging to navigate. The Prince Frederick estate & trust litigation attorneys serving southern Maryland at Meng Law are experienced in estate planning and can help you determine exactly how best to ensure your beneficiaries receive the most of your estate possible. Please contact one of our attorneys today at 410-535-5500 or online.