We Can Evaluate Whether Revocable And Irrevocable Living Trusts Are Appropriate

The Advantages Of A Revocable Living Trust

A revocable living trust usually contains a plan for managing the trust's assets, if the trust maker becomes mentally incapable of handling his or her own affairs. You can use a revocable living trust to outline who will care for you and what will happen to your assets in the event that you become mentally incapacitated.

If you name yourself as both a trustee and a beneficiary of a revocable living trust, you can go on spending your assets as you please. If you are incapacitated, your funds will be managed by someone who you have designated as a "disability trustee." The disability trustee can pay your bills and manage all of the assets named in the trust. The disability trustee only has access to funds specified in the trust, which can, but does not have to, include all your assets.

After your death, a "successor trustee" whom you name will be given access to your accounts to pay off your final debts. The trust can also specify who will receive the remainder of your assets, just as a regular will would. Those who receive your assets are called "beneficiaries" of the trust.

Assets in a revocable living trust do not have to pass through probate before they are distributed to beneficiaries. After your death, your trustee can often handle the distribution without court intervention. The lack of court records also affords your family a measure of privacy.

Irrevocable Living Trusts | Tax Benefits And Types

An irrevocable living trust is one that cannot be changed or revoked once it is created. Among other things, an irrevocable living trust can provide certain tax benefits.

Types of irrevocable living trust that can offer certain tax benefits include:

  • Qualified personal residence trust. This trust acts as a separate entity to own your home so that your home's value won't count toward your taxable estate.
  • Grantor-retained annuity trust. A grantor-retained annuity trust can give your assets to your beneficiaries without the associated gift taxes.
  • Buildup equity retirement trust. This trust pools annual exclusion gifts into an account for your spouse's later use. A charitable remainder trust helps reduce income tax by donating assets to the trust. The trust then pays a beneficiary for a specified time, then distributes any remaining funds to charities of your choice

Speak With One Of Our Estate Planning Attorneys For Expert Advice

Call the Kocian Law Group at 860-281-2908 or send us an email. We can set up an appointment in one of our four Connecticut office locations, including Manchester, Hartford, New Britain and Waterbury. Our lawyers provide estate planning services for clients throughout the state.