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Revocable Living Trusts

The Floyd Law Firm PC > Practice Areas > Revocable Living Trusts
Revocable Living Trusts

Revocable Living Trusts

At The Floyd Law Firm PC, we help a multitude of clients develop estate plans, prepare Wills, and set up trusts that are specifically tailored to their individual needs. There are several types of trusts, and Revocable Trusts are the most common.

A Revocable Trust can be modified, or completely revoked at any time, by the person creating the document. This makes it a flexible tool for use in estate planning, since the Settlor (creator of the trust, also called a Grantor or Trustor) can change the terms of the Revocable Trust to meet the needs of the evolving family. One of the common advantages is that the assets in the trust avoid probate, while the Settlor retains control over the property.

Different kinds of trusts work in different ways, but all trusts are governed by the directions put forth by the Settlor by signing a valid trust agreement and adding some assets into the trust corpus. If the trust remains unfunded (other than the nominal assets to make it valid), then the trust is considered to be inactive, since there are no assets to manage. If the Settlor (or someone else) adds assets to the trust by retitling assets into the name of the trust or making distributions to the trust from retirement accounts, a probate estate, or other source – then the Trustee named in the document must manage and care for those assets. The Trustee could be the Settlor themselves, a family member, another trusted individual, a professional bank or trust company – or a combination of these.

Each trust document will provide instructions on how the Trustee should manage those assets, including when the Trustee should pay out income and/or principal to the trust beneficiaries.

The trust document may also set out the powers of the Trustee to handle specific tasks, such as providing accounting of trust activities to the trust beneficiaries, paying taxes, and dealing with special assets or restrictions placed on certain beneficiaries. The document will also direct what happens if the serving Trustee resigns or can no longer serve in that role by naming a Successor Trustee, or a method for naming someone else to take over the role.

The trust will continue until the named Trustee distributes all of the trust assets and terminates the trust, based upon the instructions provided in the trust document. Assets managed by the trust are not owned by the Settlor; they are owned by the trust. As a result, when the Settlor passes away, the trust assets do not need to be transferred through a probate process; the trust will direct what happens, if anything, at that point.

Every Revocable Trust becomes Irrevocable upon the death of the Settlor. An Irrevocable Trust cannot be changed after it is created, and for this reason, it is critical that the language of the trust does exactly what you want it to do before it is signed and funded. Irrevocable Trusts are used to remove assets from a Settlor’s estate through transfers of insurance or other property for the ultimate beneficiaries – who are usually younger generation family members. In some circumstances, the Irrevocable Trust may also be used to insulate assets from creditor liability.

A Revocable Living Trust properly allows for the legal title of the property or assets to pass to the successor trustees without probate.

The term, “Living Trust” is known as a “Revocable Trust” as well. It is used often as a solution for a variety of concerns generally associated with estate planning, that Wills alone cannot fully address.

A Revocable Trust helps people manage their assets and adds protection if they were to become ill, disabled, or affected by the symptoms of aging. This type of trust is established during the client’s lifetime., and the client holds assets in the name of the trust while they are alive and have the right to make changes to the trust. Since the client may serve as trustee and beneficiary, many individuals experience very little difference between managing their own property outside of trust as well as the trust itself. While property is held in the name of the trust, the client still has the right to buy, sell, or give their property away.

Upon the Settlor’s death, the Trustee is generally directed to either distribute the trust property to the beneficiaries, or to continue to hold and manage the trust for the benefit of the beneficiaries. Similar to a Will, a Revocable Trust or Living Trust can provide for the distribution of property upon the client’s passing – yet, unlike a Will, the trust can also provide a vehicle for managing property during one’s lifetime and authorizes the Trustee to manage the property should the Settlor become incapacitated, thereby avoiding having to appoint a guardian for that purpose.

Your Estate Planning Attorney at The Floyd Law Firm, PC can help you to determine how a Revocable Trust can work for your specific needs.

Factors to be considered are:

  • Do you own Real Estate or other Property in more than one state?
  • Are you a recipient of a large settlement or inheritance?
  • Are you married, and is it your first or second marriage?
  • Do you think you may require incapacity planning in the near future?
  • Do you have any minor children or adult children?
  • Are there special needs children or beneficiaries involved?
  • Have you been through a divorce?
  • Affected by the death of your spouse or other beneficiary?
  • Any spendthrift or bankruptcy issues to consider?

The Benefits of a Revocable Living Trust

  • A Revocable Trust not only enables you to control the distribution of your estate, a properly funded living trust also completely avoids probate. When you establish a Living Trust, your attorney typically transfers – or assists with the transfer – all of your assets to the trust as part of the process called Trust Funding. When your trust has been funded, the assets are owned by the trust.
  • When you, as the Settlor, dies – the successor Trustee can immediately take over the management of the trust and administer the trust according to the terms. This means that your trust avoids probate and court involvement is not required. While you still need a Will in place to also specify the care of your assets, and to appoint a guardian if you have minor children, the instructions will already be in place for the probate court via the trust about how you desire to have your property distributed.
  • Your Revocable Trust maintains anonymity, unlike a Will that is filed with the court in a probate proceeding, the trust does not become a matter of public record. The Revocable Living Trust protects your family’s privacy because the trust assets avoid the probate process that allows for one's legal documents to become part of the public records and viewed by anyone. Information about who is a beneficiary of a trust is able to be kept within the family – which is best for sensitive or high-profile situations.
  • Revocable Trusts avoid many guardianship issues because if a Settlor becomes incapacitated, the successor Trustee can take over management of the assets without court involvement. If the trust is used in conjunction with a Power of Attorney, the Trustee and attorney-in-fact are not required to account to the court yearly as is necessary in a typical guardianship proceeding.
  • The trust may also allow for the temporary appointment of another person to manage assets in your trust during your absence – for instances that you may need to take an extended vacation, are in the hospital for a time, or if you were to be deployed overseas if you are in the military. Often, Corporate Trustees via a bank or a company, are chosen for this purpose.
  • A Revocable Trust avoids the necessity for probate in all the states that you may own real property. This helps to keep your beneficiaries out of court, and allows for your property to be properly distributed as per your wishes.
  • Trusts are comparably easy to manage, but not necessarily easy to create. However, in comparison to the probate process in the courts, a well-drafted trust can be much smoother and easier to administer when the time comes to do so. Each trust should be tailored to your specific needs, and to your own personal estate planning objectives.

Revocable Living Trusts Attorneys serving Surfside Beach, Myrtle Beach and throughout South Carolina

Having an estate plan in place removes much uncertainty while also protecting your estate from the costs of intestacy – as well as many estate or inheritance taxes. If you have recently relocated to South Carolina, it is essential that you have your out-of-state Will reviewed to ensure it complies with South Carolina law. Your full estate plan can include Trusts, Powers of Attorney, and advance health directives such as a Living Will and Healthcare Proxy.

At The Floyd Law Firm PC, we are here to help you find the peace of mind that comes from knowing that your affairs are in order and that those you love will not have to work through the difficulty of resolving the issues of an unplanned estate. We offer tailored Estate Planning, Estate Administration, Wills, and Trusts to best serve your specific situation.

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