Stepan, Lewis & Paxman, LC : Business Lawyers, Estate Planning, Real Estate and Litigation Attorneys in Sandy City, Salt Lake County, Utah

Revocable Livings Trusts -- Basic Facts and Fictions

Revocable Living trusts, or revocable inter vivos trusts, are estate planning vehicles. There are many myths and misconeptions that circulate. It is equally useful to mention what they ARE as well as what they ARE NOT.

What Revocable Living Trusts ARE:

Revocable living trusts are legal entities with legal rights and obligations, similar to those of an individual or a corporation. In general, they can own and manage property, including both personal property and real estate.

Revocable living trusts are often used to accomplish an individual's or couple's estate planning purposes. Many people are uncomfortable with the public nature and expense of probate (the process by which an estate is administered legally after death). For these people, a living trust can often provide greater privacy and fewer costs after death, as well as a relatively flexible entity for managing assets.

While a will is an expression of an individual's desires regarding his or her estate and interests (including the care of minor children), a trust package can accomplish those goals through a different approach. A trust can be formed while you are still alive and can own and manage all of your assets. You create a trust by executing a trust agreement. Usually upon creation of a revocable living trust, you will turn all of your assets over to the trust for management. Your assets will then be managed by the trustee of the trust, who is usually the person(s) who created the trust. As such, you remain in full control of your assets to the same degree you would if you did not have a trust. Upon your death, your trust is managed by successor trustees that you nominate before you die in the trust agreement. They step into your shoes and follow the instructions you have set forth in you trust agreement, which may include: paying for funeral expenses, distributing money to relatives or friends, filing and paying taxes, winding up your affairs, continuing to hold property in trust, etc.

Generally speaking, the trust estate does not need to be administered in probate court, which can save considerable time, expense and effort.

What Revocable Living Trusts are NOT:

While it is impractical to attempt to list everything a living trust does not do (such as drive your car for you and feed the dog), it is useful to disspell some common myths. First, a revocable living trust does not provide asset protection. Transferring your assets to a revocable living trust, with nothing more, does not protect those assets from lawsuits brought against you. Second, it does not change your obligation to the Internal Revenue Services to pay income and related taxes. Likewise, it is not meant as a vehicle for hiding property, avoiding child support payments and other legal obligations. In sum, revocable living trusts are not there to avoid legal obligations or to assist in committing fraud or deception.

Stepan Lewis & Paxman, LC, provides revocable living trusts as part of a trust package, which includes: a living trust, wills, general powers of attorney, special health care powers of attorney, living wills, and deeding your personal residence into your trust. We offer the trust package for an affordable flat fee whenever appropriate.

For more information about the entire range of our estate planning services, click here.

The material on this web site is for general information only and does not contain a full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The viewing of this web site and the material contained herein does not create an attorney-client relationship with this Law Firm. Gregg K. Stepan is admitted to practice law in Utah and the District of Columbia. Christopher F. Lewis, Isaac D. Paxman, and Richard N. Barnes are admitted to practice law in Utah.