How to Protect Your Family’s Legacy with Revocable Trusts
Nothing in this life is certain, and you never know what the future may bring. This is why it’s so important to have a plan in place to prepare for the unexpected.
In making an estate plan, a common strategy for many people is protecting family assets using revocable trusts. However, revocable trusts can do more than protect your existing assets. They can also go a long way toward protecting your family’s legacy for generations to come.
If you want information on protecting your family’s legacy through a revocable trust, the family law and estate planning legal team at Mills & Anderson can help. Use our guide below to learn more about revocable trusts, how to use one to protect your interests and your family’s legacy, and what our team can do to help.
What Is a Revocable Trust?
A revocable trust is a type of legal arrangement through which an individual, known as a settlor, is able to transfer ownership of their assets into the trust while still maintaining full control over the assets during their lifetime. A revocable trust is also commonly known by other names, such as family trust, RLT, living trust, or inter vivos trust.
A primary benefit of revocable trusts is the settlor’s ability to manage and distribute assets during their lifetime. However, revocable trusts are also frequently used as an estate planning tool due to their ability to facilitate a seamless transfer of assets even after the settlor’s passing.
Components of a Revocable Trust
Before getting into the details of legacy protection through revocable trusts, it’s important to have a basic understanding of how such a trust is created and how it works. Below are the primary components of a revocable trust agreement in Nevada.
The settlor is the individual who initially creates the trust. So long as the settlor has the requisite mental capacity, this individual will typically retain control over the trust during their lifetime. In other words, they retain the ability to manage and transfer the trust assets during their lifetime.
A trustee is the party to whom the settlor grants authority to manage and distribute trust assets. The trustee has a fiduciary duty to distribute the assets in accordance with the terms set forth by the settlor in the trust agreement. This is a big responsibility that should not be taken lightly, as trustees can be held liable if they breach their fiduciary duties regarding the trust. In fact, some trustees hire an attorney to help them properly administer the trust assets.
Notably, the trustee can be an individual or an entity.
In many cases, the settlor will serve as the initial trustee, allowing them to retain complete ownership and control over any trust assets during their lifetime. However, naming one or more successor or alternate trustees is strongly recommended to prepare for a time when the settlor passes away or becomes otherwise incapacitated.
Beneficiaries are the individuals or entities named in the trust instrument to whom you ultimately want to leave your trust assets. They are beneficiaries because they are the people who benefit from the trust. Beneficiaries can be family members, loved ones, charitable organizations, or any other important people or entities in your life.
Last but certainly not least are the trust assets. This is the property that the settlor transfers into the trust. The settlor continues to manage the assets during their lifetime, but after they die, the assets get distributed to the beneficiaries named in the trust document. Trust assets can include real estate, bank accounts, investment accounts, and other assets and personal property.
You’ve worked so hard to grow your finances and build your legacy. Be sure to take steps to protect your assets for yourself and your loved ones moving forward.
Advantages of Revocable Trusts: Using Revocable Trusts for Legacy Protection
There are a number of ways a revocable trust can help protect your legacy. Below are some of the most common advantages of revocable trusts.
One of the most sought-after benefits of a revocable trust is the ability to avoid probate. Probate is the court process by which a deceased individual’s assets are distributed after their death. And going through the probate court process is both time-consuming and costly. However, assets held in a trust can typically bypass the probate process, which can save valuable time and money.
Flexibility and Control
Trusts are also advantageous due to their flexibility in the management and control of trust assets. Through a trust, you can designate certain conditions for when beneficiaries can receive trust assets, provide specific instructions for managing assets for beneficiaries with special needs, and much more. Additionally, due to their revocable nature, the settlor of a revocable trust can generally modify certain terms or revoke the trust entirely during their lifetime if circumstances change.
Another benefit of a revocable trust is the ability to provide a clear plan within the trust agreement itself for how assets should be managed if you become incapacitated while you are still alive. A clearly defined trust agreement can help facilitate a smooth transition from the settlor or initial trustee to the successor trustee. This smooth transition helps ensure that your assets and beneficiaries continue to be cared for without interruption.
These are only a few of the many benefits of a revocable trust. If you have questions about what other advantages may exist and how they might apply to you, speak with an experienced estate planning legal team to discuss your options.
Learn More About Revocable Trusts for Legacy Protection Today
When it comes to your legacy, it’s important to take the appropriate steps to preserve it as best you can for yourself and for your loved ones.
At Mills & Anderson, we know how important family is. This is why we’ve dedicated a large portion of our practice to helping individuals throughout Nevada protect their rights, assets, and interests. With over 40 years of collective experience in the areas of family law and estate planning law, we are confident that we have what it takes to help you protect your legacy.
Contact Mills & Anderson to discuss your needs and goals and see how our team can help you today.