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Do you need a revocable living trust in your life?

Everyone over the age of majority needs an estate plan. Like most Oklahomans, you may think that means a will, powers of attorney and a living will. That might work in some cases, but many people, including you, may benefit from one more document: a revocable living trust.

Since this type of trust is created during your lifetime, you can serve as the grantor (the one making the trust), the trustee (the one who administers the trust) and the beneficiary (the one who benefits from the trust). During your lifetime, you can make changes to the trust itself and add, remove or otherwise deal with the assets in it. This makes it revocable or changeable. A revocable living trust can serve you during your life, during incapacitation and after death.

During your lifetime

The trust might hold them, but you maintain control of your assets during your lifetime. Because of this, the trust does not have its own tax identification number. It uses your social security number, and you include the trust's taxable income on your income tax returns.

If you become incapacitated

There may come a time when you can no longer make decisions or handle your own affairs. Your revocable trust should include provisions for this eventuality. You name someone to take over as trustee and provide instructions regarding how to administer your trust so that it continues to benefit you during your incapacitation.

When you die

Upon your death, your revocable living trust becomes irrevocable. The trust can no longer be changed in any way. A successor trustee takes over the administration of the trust. The trustee distributes the assets in the trust to its new beneficiaries in accordance with the terms you desire.

How your trust is viewed in probate

The IRS might consider you and your revocable living trust one entity, but the probate court doesn't. It considers the assets to belong to the trust, not to you. After your death, only your assets that are not in the trust require distribution through probate. The assets in your trust do not.

Setting up a revocable living trust

If you decide that you could benefit from a revocable living trust, consider using an Oklahoma estate-planning attorney to do so. The language of the trust must conform to current laws, and its execution must occur under specific circumstances. In addition, putting your assets into the trust often requires additional legal documentation. If not done properly, you could lose the benefits you hope to gain from the trust.

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