When planning your estate, you may be overwhelmed by the sheer number of options you have. From Holographic Wills to Spendthrift Trusts, it can be difficult to determine which options are right for your situation. As such, one thing many are unsure of is the difference between a Living and Revocable Trust Fund. If this represents your circumstances, the following blog explores what you should know about your options, including the importance of working with a Medina County, Ohio Trust preparation lawyer to discuss what is best for your needs.
What Is the Difference Between a Living and Revocable Trust?
A Living Trust is one that is established over the course of your life. However, this document can be Revocable, meaning you retain the right to alter the terms and conditions of the trust throughout your life, or Irrevocable. An Irrevocable Trust, as the name suggests, cannot be changed or altered once it is established. As such, it’s important to understand that a Revocable Trust is a type of Living Trust, but not all Living Trusts are Revocable.
One of the primary benefits of both a Living Revocable Trust and a Living Irrevocable Trust is the fact that both of these offer asset protection when it comes to probate. Upon your passing, your estate typically undergoes the Probate process, which occurs when the state oversees the distribution of assets according to the terms and conditions of the Will. However, this process can be incredibly time-consuming and expensive, so many opt to bypass it by establishing a Trust.
You should note, however, that a Living Irrevocable Trust does offer additional protection. This is because the assets held in this Trust are transferred out of your possession and into the possession of the Trust upon its creation. This means that, should you face a lawsuit, creditors would be unable to access these assets as they are technically no longer yours. However, this does not apply to a Living Revocable Trust, as you still have control over the funds, meaning they could potentially be seized.
How Do I Know Which One Is Right for Me?
If you’re interested in establishing a Trust, it’s critical to discuss your options with an experienced attorney to help you understand your options and which is best for you. In general, you’ll need to decide which is more important to you – retaining control over your assets over the course of your life or protecting them in the event legal troubles should arise. Working with an attorney can help give you more insight into your specific financial circumstances so you can make a decision you feel confident in.
As you can see, there are a significant number of factors you’ll need to take into consideration when estate planning. That is why it is critical to connect with an attorney at Krause Law. Our firm understands how overwhelming this process can be to navigate, which is why we will do everything in our power to help you fight for the best possible outcome for your circumstances. When you need help, contact us today to learn more.
