Have you been wondering what the term “inter vivos trust” means and why it should matter to you? Here’s what you need to know. This type of trust is actually one you’ve probably read about in your research, but it is more commonly known by its other name – the living trust. Our living trust attorney will explain everything you need to know about a Huntersville revocable living trust.
What is a revocable Living Trust
A Huntersville revocable living trust is a powerful legal agreement that can be used for a variety of purposes. This trust involves a trustor (or grantor) transferring his assets into the trust. That trustor can name himself as the trustee and maintain effective control over the assets while he is alive. He can even write the terms of the trust so those assets are used for his own benefit until he dies, at which time they are directed for the benefit of any secondary beneficiaries he names. A successor trustee is designated to take control when he dies.
How a Huntersville revocable living trust works
The revocable living trust is an estate planning device that you should certainly consider. Contrary to a widely held belief, you do not have to be a multimillionaire to benefit from the creation of this type of trust. Plus, you do not surrender control of assets that you convey into a living trust. You can act as the trustee while you are living, and you can also act as the initial beneficiary. You can also change the terms of the trust, and you can even rescind or revoke the trust entirely at any time.
The benefits of a Huntersville revocable trust in general
Some special advantages come with revocable trusts. They don’t require that the trustor gives up complete control over his assets since he can serve as both trustee and beneficiary during his lifetime. Moreover, these trusts can be revoked at any time, so even the transfer of ownership can be reversed if circumstances require it.
The revocable trusts can provide a useful way to transfer assets to heirs when you die since the terms of the trust will determine which beneficiaries receive which parts of the estate and when. These flexible trusts can also be used to more efficiently transfer assets between spouses without incurring additional tax liability.
The Irrevocable Living Trust
If you’re more interested in tax advantages and better asset protection, the irrevocable trust may be an even better option. While many people remain reluctant to use irrevocable trusts – primarily due to the inability to cancel them or alter their terms once they are created, they can have some big benefits. For example, an irrevocable trust can provide a means for avoiding estate tax liability by placing certain assets outside of your main estate. Since those assets are no longer owned or controlled by you, they are not counted when your estate’s value is calculated for tax purposes.
An irrevocable trust can also provide a means for protecting assets and shielding them from being counted by Medicaid when you’re trying to qualify for nursing home benefits. Of course, to make the most effective use of any trust for Medicaid planning, it is best to begin your efforts early. That will help you to minimize any chance that you might run afoul of the program’s look-back period and end up incurring an ineligibility penalty.
Specific types of living trusts
Other types of trusts are designed to accomplish a variety of specific goals. Charitable trusts can be set up to provide funds to a charity for a set period of time, with whatever is left over at the end of that time going to your heirs. You can even set up a trust that provides income to you until you die and then delivers the remaining assets to your favorite charity. These trusts are valuable for both you and the charities since it enables you to more effectively support those causes over many years.
A spendthrift trust can be a useful way to ensure that your heirs don’t frivolously spend their inheritances. These trusts can provide measured distributions or time, or simply protect the inheritance from the heir’s creditors. A trust can also be used to designate someone to manage your assets in the event that you are incapacitated. That can help protect your estate during a lengthy period of incapacitation. You can also create trusts to care for pets or manage other planning needs that are difficult to address through traditional wills and powers of attorney.
Join us for a FREE seminar today! If you have questions regarding living trusts or any other estate planning matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (704) 944-3245 (Charlotte, NC or Huntersville, NC) or for individuals in Kentucky (606) 324-5516 (Ashland, KY) or (850) 372-6655 (Florence, KY). We are here to help!