National Safety Month: Revocable Living Trust
June has been recognized as National Safety Month by the National Safety Council for over 25 years. June is used as National Safety Month to spread awareness to the public of the top safety and health risks in the United States. A revocable living trust is a legal tool that can protect you and your loved ones from the emotional and financial repercussions that can come with incapacity or death. Having this revocable living trust can prevent yourself and loved ones from costs, confusion and uncertainty that can be results of your incapacity or death.
How a Revocable Living Trust Can Protect You
Everyday we all get put at risk of suffering a horrible accident or falling ill which could result in becoming incapable of being able to take care of yourself or others. The length being incapacitated can range from being temporary or until your death. The complete cost of being incapacitated is difficult to calculate considering it could include lost wages or the cost of medical care or even care for help with everyday tasks such as eating, bathing, dressing etc. However these costs can quickly add up considering the average cost of assisted living was around $4,300 per month in the United States as of 2020.
What Is “Assisted Living” and How Much Should It Cost? AssistedLiving.org, (last visited May 24, 2022)
So how can a revocable living trust protect you?
A revocable living trust can protect you by providing instructions for how you and your loved ones will be financially supported throughout the duration of your incapacity. This will also give you the chance to choose who will be handling your finances when you’re unable to do so yourself. There is no wrong time to create a revocable living trust considering that it is revocable; this means you can change it at any time as long as you have mental capacity.
How a Revocable Trust Can Protect Your Loved Ones
A revocable trust not only protects you but also your loved ones. It provides them with detailed instructions of what you want to happen upon your incapacity or death. This prevents your loved ones from being left to guess and worry about what you would have wanted along with not having to look at state law to determine who will be given authority to handle your financial and end of life wishes.
Estate administration fees do vary broadly by state however they too can become very costly. For example in California probate attorney and executor fees are set by law. With these laws the attorney and executor fees to probate a home worth $800,00 could get as high as $38,000. Having a revocable living trust however can wipe out the chance of probate and the fees associated with it.
California Probate Fees 2020, Velasco Law Group (Feb. 14, 2020).
Another beneficial aspect of a revocable living trust is that they remain private. If instructions are not provided family members often have to go through a public court process. This means that your information is shared in the court so multiple individuals can listen in on your private matters.
A Revocable Trust Requires Proper Funding to Work
A revocable living trust must be properly funded in order to be effective. Properly funded meaning that your property must be owned by the trust or the trust must be named as a beneficiary depending on the type of property. In the event your revocable living trust isn’t properly funded a probate may be needed. This means June is a great time to review communications that have been received from your attorney about accounts and property that may need to be owned by the trust or need their designated beneficiaries changed to name the trust.
Since the instructions within a revocable living trust are so detailed, it’s important to go over them each year to ensure that they’re up to date on your wishes and current situation. If you are in need of making any changes, please contact us as we are happy to update your revocable living trust so you have what works for you and your loved ones at the time of incapacity and at your death.
Have questions? Call us, we're available 24/7 to speak with you and help you get started.