REVOCABLE TRUST - SAVING YOUR FAMILY FROM HELL.
Truth and death are sure to strike at the appropriate hour. Though human beings can not plan tofinish all their unending chores before their death or before they are incapacitated, they candefinitely plan the management and disposition of their property before the inevitable happens.The law which governs such management and disposition of an individual's property is the Law of Trusts and Estates. Trust can be created in conjunction with a will or as an alternative to it. Theframework for determining the validity and limits of a Trust and a Will is provided by the StateLaw.Trust, in general, gives a right in the property (real or personal) held in a fiduciary relationship bya party to another party, who is the beneficiary. By doing Estate planning, you protect your assetsand independence as long as you live and even if you are mentally or physically incapacitatedand at the same time, you are making provisions for protecting your family and loved ones evenafter your death. There are two types of Trusts and they are an after-death Trust and a LivingTrust. An after-death Trust gets life by virtue of a Will only after the person's death and a livingTrust is made while the person establishing the Trust is still alive. The purposes of a living Trustare to keep the estate confidential and to avoid Probate.Has your job come to an end once you have finished your estate planning process by appointinga trustee, making transfers of your property to your living Trust and deciding who should be theguardian of your minor children, how and who will protect you if you become disabled, etc.? Theanswer is a big 'No'. Throughout your life, till you breathe your last, you live on a roller-coaster.This is true in any body's life. The entire life is nothing but a "work-in-progress".Hence your estate plan also needs review from time to time, may be once in 5 years. Hereenters the concept of The Revocable Trust.Your children may be very young today but after 5 years, they may have grown up. Manychanges may have occurred during these 5 years. You may have grandchildren or your childrenmay have got married to someone who is a spendthrift. Your worth may have increased. Theremay be a birth of a child or a grandchild or you may have lost your spouse or remarried after adivorce, you may have got a huge inheritance, you may have retired, you may have moved to anew place or you may have a child or grandchild with a major medical problem and it needs hugespending on medical care. All these changes in your life's situations warrant that you have toadjust your estate plan accordingly. If you do not do it, may be, you are making the life of your family members miserable. The same exercise should be done on completion of every 5 years aslong as you live. You have to remember that change is the only unchanging thing in life.The Estate Tax system may have undergone significant changes during the course of these 5years. The value of your estate may have gone up and may appreciate more during the next 5years. Therefore, adjusting your estate plan becomes necessary.The economic situation is deteriorating and nobody can determine what will be your worth after 5years. Such a crisis in the economic situation may impact the lifestyle and needs of your familymembers.Your aim is to make them comfortable and they should be able to handle the inheritancebequeathed from you. Five years from now, you may wind up your business but may like tocontinue with the same lifestyle. These are compelling aspects which necessitate reviewing andchanging your Estate Plan periodically. A Revocable Trust is the tool through which this purposeis achieved.Whenever there is major change in your life which also impacts the life of your family members,you have to consult your attorney and effect the changes needed. Not doing so will make your family members and loved ones pay for it dearly and it will be terrible price to pay.
Leave a Comment