Atlanta Financial Newsroom
5 Advantages of Revocable Living Trusts: Should You Have One?
July 9, 2019
In working closely with two separate, long-term clients over the last three months, I saw first-hand how they and their families experienced the benefits of having their assets in a revocable living trust. Depending on your circumstances, a revocable living trust could be very beneficial to you and your family. For my older clients, it is something that I highly recommend they consider. Below I will highlight five key advantages of having a revocable living trust and how having one may be beneficial for you.
What is a revocable living trust? In its simplest form, it is a document that expresses your wishes as to how you want your assets to be handled should you die or become incapacitated, and who will be responsible for handling your affairs. Once the legal document is written, you can fund the trust with the assets that you want to be covered by the terms of the trust, such as your bank and investment accounts, real estate, and other assets. With a revocable living trust, the assets are treated like they are still yours. In fact, your revocable living trust will use your social security number for its filings and any income from assets in the trust will go on your tax return.
What are some advantages of revocable living trusts?
- They are flexible and revocable: Revocable living trusts are changeable and flexible. You can alter or even void the trust and its provisions whenever and however you want. You can appoint yourself as the trustee and have the ability to make any and all decisions as you see fit. You can change your beneficiaries and your successor trustees to meet your needs as your life and family circumstances change.
- A revocable living trust provides a smooth transition between three stages of your life: The three stages are 1) while you are alive and well; 2) while you are alive, but incapacitated; and then 3) after your death.
With a well drafted revocable living trust, the transition between these stages of life happens automatically. You don’t need to go through court proceedings to have a guardian or conservator appointed if you are still living but incapacitated, or go through the probate process for the assets in the trust after you have died. This is accomplished because creating a revocable living trust involves naming a successor trustee(s), that you choose to manage the trust for you if you die or become incapacitated, without involving the courts.
- You can avoid the costs of probate: Probate is a court proceeding where your assets are distributed per your written directives in your will. It is a relatively slow process that can take several months or up to a year. In some states, probate costs are expensive. While fortunately the cost of probate in Georgia is relatively inexpensive, if you have end up in probate in other states you may not be so lucky (for example if you own real estate in another state, or move in retirement). The overall cost of probate including fees and expenses can be in the ballpark of 2%-7% of the value of the estate, but could be more depending on the facts and circumstances of the individual case.1
Also, if you own real estate in more than one state, you will have two or more probate proceedings if you leave the real estate to your heirs through your will because each property would have to be probated where it is located, increasing the costs of probate even more.
- A revocable living trust can provide loved ones timely access to cash during difficult times: Making sure that there are readily available funds to support a dependent child or another loved one is often a big concern for some of my clients should they pass away. They are very concerned that their funds will be tied up in the probate process and not be available where and when they are most needed. Having a revocable trust addresses both of those situations.
- Revocable living trusts keep things private: Probate is a public proceeding and people are able to go to the courthouse and read your will, see what you owned and left to others, and also find out who got what. Revocable Living Trust documents are never filed with a court so they don’t become public record for everyone to see. This protects the privacy of your wishes, your assets, and your beneficiaries.
Revocable living trusts can be an excellent planning tool in many different situations. If you have questions about whether or not having a revocable living trust is appropriate for your situation, please contact your Atlanta Financial advisor, and we will work with you and your attorney to determine what is best for you based on your specific goals and objectives.
1 The Cost of Probate: A State Comparison www.legalmatch.com Ken LaMance
The Setting Every Community Up for Retirement Enhancement (“SECURE”) Act was signed into law on December 20, 2019. With all of the discussion in the news around the political uncertainty, impeachment, and the looming trade war, one of the largest changes to retirement savings laws in recent years was passed with very little fanfare. However, some of the changes will be significant. I have tried to highlight what may impact the majority of our clients and readers.
The Act has a lot of positives such as simplifying rules and making 401k plans potentially available to more workers, pushing back the RMD age, and allowing contributions to IRAs past age 70. The negative impact I see is the elimination of the stretch IRA which is a clear move by the government to raise tax revenues by forcing money out of inherited IRAs sooner. I will discuss in more detail below, but this should be a time to review beneficiaries and discuss whether any change in your legacy planning should be made in response to the new laws. What do you need to pay attention to?
Recently, my husband and I took care of our 12-month old granddaughter while our daughter and son-in-law took a much-needed vacation together. When they dropped her off, their parting words were, “She is almost ready to walk, but make sure she waits until we get home!”
Famous last words… Of course, as soon as they left the house, she was trying to walk – literally everywhere. And after about 24 hours she was taking her first baby steps. By the time they arrived back three days later, she was walking (a little unsteadily but walking none-the-less) and was very proud of herself. Great strides in just a few days but predicated on all of the trial and error and lessons learned in the months before.
Financial planning is a little like this. You’ll make mistakes along the way – everyone does. But you will do a lot of things right as well and the important thing to remember is that your financial health is based on doing the little things right, all along the way.
So, what should you be doing when you are 22, 52 or 72? Here are three important tips for each decade.
Cathy Miller Receives the Women’s Choice Award® as Highly Recommended Financial Advisor by Women for Women for Seventh Consecutive Year
Atlanta – November 19, 2019 – Atlanta Financial Associates, an independent financial advisory firm, recently announced that Cathy Miller, MBA, CFP® , CRPS®, CDFA™, has received the Women’s Choice Award® for Financial Advisors and Firms.
As the leading advocate for female consumers, WomenCertified Inc. selected Miller based on rigorous research and specific objective criteria; she has received this recognition every year since 2013.