A Revocable Living Trust is one of the most misunderstood parts of estate planning, especially since many people associate trusts with the extremely wealthy and the term “trust funds.” But Revocable Living Trusts can be created by just about anyone looking to make an estate plan, and they provide a number of significant advantages when it comes to avoiding probate and having others help you if you become incapacitated.
The only types of assets that must go through a prolonged probate process are solely-held assets—this means anything that is owned by one individual without any beneficiaries. When a Revocable Living Trust is created, the trust maker (Grantor) transfers their assets into the trust which is then controlled by a Trustee. In almost every case, the Grantor also serves as the Trustee, meaning the only thing that really changes with their assets is how they’re titled. When that person passes away, their assets do not have to go through probate because those assets are owned by the trust. Avoiding probate saves your loved ones the hassle and cost of a long probate process and affords privacy for your final affairs. A North Carolina elder law attorney can help assess your situation and advise you on whether or not a Revocable Living Trust would be best for you.
As noted above, the Grantor typically serves as the Trustee of their own Revocable Living Trust. However, Successor Trustees are named to take over the Trust in the event of the original Trustee’s death, incapacitation, or if they would just rather have someone else handle their financial affairs. A Successor Trustee would then have control over all the assets held in the Revocable Living Trust and could make decisions on the Grantor’s behalf. This situation could also help avoid a court conservatorship where a person is appointed by the court to handle the conserved person’s financial affairs. You should speak with a North Carolina elder law attorney if you have any questions about how a Successor Trustee can work with your Revocable Living Trust.
However, if the Grantor has any solely-owned property outside of the Revocable Living Trust, then a Power of Attorney would be needed to handle financial matters while the Grantor is still alive but incapacitated. For example, an IRA is always owned by just one person (it is never co-owned). An IRA is never put into a trust during the owner’s lifetime. Similarly, a probate estate must be opened in the event of the Grantor’s death to administer property that does not pass by survivorship or beneficiary designation.
If you would like to learn more about planning to avoid probate with a Revocable Living Trust, or if you’d like to discuss your current estate plan and Revocable Living Trust, please set up an appointment at our Greensboro elder law office by calling (336) 378-1122