Your revocable living trust (RLT) is a vehicle to deliver your assets to your beneficiaries — including you, if you become incapacitated. Think of your RLT as a little red wagon. In order for your wagon to do its job, you must load it up with your stuff. Anything you do not put into your wagon may not reach your intended beneficiaries without being subjected to an expensive, time-consuming public court proceeding.
If the proceeding is required in order to allow your assets to be spent on you while you are incapacitated, it is called a “conservatorship.” If the proceeding is required in order to allow your loved ones to receive their inheritances, it is called a “probate.” Either way, going to court can be costly and take a long time. Court proceedings can also draw unwanted attention.
You can spare yourself and your loved ones from having to go to court by transferring (called “funding”) all of your stuff into your RLT.
There are a few assets (most notably, life insurance policies, annuities and retirement plans), that do not need to be transferred into your RLT during your lifetime. Often, the most effective way of transferring these kinds of assets is through beneficiary designations. Another item you might not want to put into your RLT is your automobile, but you should discuss it with your attorney.
EST8PLANNING COUNSEL LLLC
Scott Makuakane, Counselor at Law
808-587-8227 | maku@est8planning.com
Est8planning.com
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