Hopefully by now you understand the basics on what a trust is, so we are going to look at one of the most common types of trusts, the Revocable Living Trust. The easiest way to remember what exactly this is by remembering that “revocable” means you can change your mind, so like the meaning of the word, you can make changes to the trust.
A revocable living trust is like a door. Things go in and things go out. For example, if today you open a checking account, it can go in the trust. Another few months go by, and you open a savings account. Then you decide to buy some stock in your favorite company. You can put it all in the name of the trust.
But what if you need to take something out of the trust? That’s why it’s a good thing that this kind of trust is like a door! You can take an asset out if you need to.
Additionally, if you suddenly pass away, so long as your trust has written instructions to your successor trustee, your family should not have to go through probate after you die because your trust is holding all of your assets securely.
Remember though, that this is not the only kind of trust available to you. Revocable living trusts do not have any asset protection, and that may be something you need if you need long-term care, for example.
More on other types of trusts to follow.
-Anthony B. Ferraro