Estate planning does not tend to be something that a lot of Americans think about. Only about 33% of Americans have one as of last year.
When people think about what happens to their assets when they die or become incapacitated, they may only think about a will. However, you can have something called a living trust that will help you go about protecting real estate assets and more.
It can be useful if you live in a RAL real estate facility as well.
What is a revocable living trust? What are the biggest revocable living trust benefits?
This guide will break down the pros and cons of revocable living trusts.
Protecting Real Estate Assets
One of the biggest things that revocable living trusts can do for you is protect any real estate assets that you have. This can happen when someone starts to run out of money and they can no longer live on their own.
Then, they may go into a RAL real estate facility and people may go after your assets to help fund this. That could mean that you could lose the home you lived in for decades and fail to pass it down to your children.
Well, one of the biggest revocable living trust benefits here is that with this type of trust, you can greatly improve your chances of protecting your home from creditors or even your local government.
That is because you can put a clause in the trust where if you no longer have the mental or physical capacity to function on your own, you can pass your assets down to a beneficiary and let them handle your affairs. As a result, this could be a way for you to let your children get your home while you are still alive.
About 80% of Americans can’t afford to live in a nursing home for more than two years. If that happens to you and you do not prepare for a scenario where you need a nursing home, you can leave your assets exposed to cover the costs. Avoid this possibility by setting up a living trust.
Less Chance of Probate
Another benefit of a living trust is that your assets are less likely to go through probate. That means that an estate lawyer does not have to fight a case in court for your loved ones to receive your assets immediately.
There is less legal scrutiny with this option and it can also minimize the risk of your loved ones having to take on any of your debt. This can naturally build up because of assisted living needs mentioned above or because you were not the best at handling your finances.
Going this route nearly eliminates this concern and nearly eliminates any dispute as to who gets what asset.
The only thing that you need to keep in mind here is that just because an estate lawyer sets up a living trust for you does not automatically guarantee that your assets will avoid probate. There are some scenarios where this can still happen. This merely minimizes the risk significantly.
Managing Assets
Another big benefit of a living trust is that it is easier to make adjustments to this while you are still alive. This is especially the case if you become incapacitated and mentally unable to manage your assets yourself.
A will does not offer as much protection here because it can only get put into action once you die. On the other hand, a living trust allows you to place this responsibility on someone that you trust and someone who you deem reliable to watch over all of your assets.
This can make a transitional period a lot less complicated and it can avoid having your assets put up in the air. If you are someone that is worried about losing your mental capacity while you are still alive, you should seriously consider going this route.
Cost
Unfortunately, there are some cons to making a living trust instead of a will. One of those cons is the fact that it is going to cost more money to set this up than a will.
The major reason for this is that there are typically more clauses to this than a will. Since a will only take place when you die, there are fewer things that you need to account for. As a result, it is not as complicated for an estate lawyer to draw up a will compared to a living trust.
You have to ask yourself if your assets are vulnerable enough without a living trust to make it financially worth making a living trust instead of simply drawing up a will.
RAL Real Estate
Something you may want to consider if you think you will reach a point where you cannot live on your own is RAL real estate. This tends to be an assisted living facility where people who struggle to meet all of their needs on their own can get some help with certain tasks.
This can be keeping track of medication, getting help with changing, having proper meals, and more.
The point of all of this is to do this while you have some sort of mental capacity. It avoids you from getting blindsided by this as well as makes it easier to manage the rest of your assets as long as they were already part of a living trust.
Talk to a Financial Professional
So, what is a revocable living trust? It can be something that allows you to pass your assets down to your loved ones smoothly while you are still alive.
It prevents complications from arising if you are mentally incapacitated while you are still alive. As a result, it makes it easier to transfer assets to beneficiaries if you do reach this state and need RAL real estate.
Just keep in mind that these trusts tend to be more expensive than wills due to the complications with them.
Do you want to know more? Get a free consultation here.
