Revocable Living Trust Highlight For Free

With a revocable trust (or grantor trust), the grantor owns the trust property.

For a revocable living trust to take effect, it should be funded by transferring certain assets into the trust. Often people fund a living trust with real estate, financial accounts, life insurance, annuity certificates, personal property, business interests and other assets.

Assets that should not be used to fund your living trust include:Qualified retirement accounts 401ks, IRAs, 403(b)s, qualified annuities.Health saving accounts (HSAs)Medical saving accounts (MSAs)Uniform Transfers to Minors (UTMAs)Uniform Gifts to Minors (UGMAs)Life insurance.Motor vehicles.

The Pros and Cons of Revocable Living TrustsProbate can be avoided.Ancillary probate in another state can also be avoided.Protection in case of incapacitation.No immediate tax benefits.No asset protection.It requires some administrative work.More items...

The primary benefit of creating a revocable trust is that it provides a prearranged mechanism that will ensure the continued management and preservation of your assets, should you become disabled. It can also set forth all of the dispositive provisions of your estate plan.

Trusts and Bank Accounts You might have a checking account, savings account and a certificate of deposit. You can put any or all of these into a living trust. However, this isn't necessary to avoid probate. Instead, you can name a payable-on-death beneficiary for bank accounts.

Some assets are more appropriate for funding into a trust than others.Cash Accounts. Rafe Swan / Getty Images.Non-Retirement Investment and Brokerage Accounts.Non-qualified Annuities.Stocks and Bonds Held in Certificate Form.Tangible Personal Property.Business Interests.Life Insurance.Monies Owed to You.More items...