ESTATE PLANNING, WILLS & TRUSTS

 

REVOCABLE (LIVING) TRUST AGREEMENTS

 

Avoiding Probate with a Revocable Living Trust

 

A Revocable (Living) Trust Agreement (RTA) or Living Trust, is essentially a substitute for a Last Will and Testament (LWT).  An RTA is created by a Grantor or Settlor.  Like a LWT, an RTA can be amended, revised or revoked at any time prior to the Grantor's death. The Grantor of an RTA continues to enjoy all benefits and control of the assets in the trust throughout his or her lifetime. These benefits include the right to add or withdraw trust property, change the beneficiaries or their respective shares, and modify the overall plan of distribution set forth in the trust. Upon the Grantor's death, the terms of an RTA or LWT become irrevocable.

 

For purposes of Federal Estate tax planning, an RTA and LWT are equally effective. For example, a Credit Shelter (By-Pass) Trust can be established in both an RTA and a LWT. Unlike a LWT, however, the property in the RTA is not required to be probated. This avoids wasted time, expense, and possible publicity associated with the probate process.

 

After an RTA is implemented, all of the Grantor's property that would be subject to probate should be transferred to the trust. This includes real estate, stocks, bonds, marketable securities, titled assets such as automobiles, boats, aircraft and motorcycles, and other non-titled assets such as antiques, jewelry and artwork.  Under the new South Carolina Probate Code which became effective January 1, 2014, if an individual dies owning a probate estate having a value greater than $25,000, less liens and encumbrances, the estate must be probated. This makes it imperative that all probate assets be transferred to the trust.

 

Certain assets may not be subjected to probate and may not require transfer to an RTA. For example, jointly owned property held with a right of survivorship becomes the property of the surviving person by operation of state law. Property such as life insurance proceeds, Individual Retirement Accounts (IRA's), other deferred compensation accounts and Paid on Death (POD) accounts may be payable directly to a beneficiary and therefore do not need to be transferred to the trust in many circumstances.

 

If you are interested in establishing a Revocable (Living) Trust Agreement as part of your estate plan, the Law Office of John Kachmarsky can assist you in implementing a trust document tailored to your specific needs and desires, and guide you in properly transferring or titling your probate assets. 

 

Contact us today to discuss your immediate estate planning needs and long-term wealth preservation goals.