No. Estate taxes are calculated based on your gross estate (anything you own), regardless of whether or not those assets are in your name or in the name of your RLT. However, if an RLT is right for you, it can be structured to create a credit shelter upon your death, which can reduce the amount of estate taxes that will be due at your death.
What Is a Revocable Living Trust?
Learn how to use a Revocable Living Trust (RLT) to specify how your assets are handled both now and after your lifetime.
Frequently asked questions about Revocable Living Trusts
No. Because you still have control over your RLT, it is considered a grantor Trust, and is generally treated as the same taxable entity as you.
Yes. Any assets that are titled in the name of your RLT during your lifetime will avoid probate. This does not, however, include assets that your Will puts into the Trust after your death.
No. Since you still have control over the assets in your RLT, the assets are still subject to your creditors. If you are concerned about asset protection, you should speak with a qualified attorney.
An RLT allows you to be your own trustee during your lifetime, but can allow a successor trustee to step in upon your incapacity. Although a Durable POA also allows an attorney-in-fact to act for you during incapacity, the powers granted are broader than an RLT. An RLT has more flexibility to restrict the actions of the trustee.
Maybe. Your RLT only controls those assets that are titled in the name of the RLT. A Durable POA can allow your attorney-in-fact to transfer additional assets to your RLT to be sure those assets are administered and distributed according to the terms of your Trust.
Yes. While an RLT contains many of the same provisions as a Will, it does not completely replace your Will. Since the provisions in the Trust only control the assets that have been transferred to the Trust, an RLT is often used in conjunction with a “pour-over” Will. In this situation, any assets that were not in the name of the Trust will “pour” into the Will in the event of your death. The assets are then administered according to the terms of the Trust document.
SECU recommends that you consult an estate planning attorney to create a Revocable Living Trust. While there are self-service templates and “kits” available, you need to consult an attorney to obtain legal advice about your individual situation to avoid making an unforeseen mistake. A Trust is a very important legal document, and you should have professional advice in executing what may be one of the most important documents in your life.
No. The Estate Planning Essentials Program is intended to cover the estate planning needs of most members whose situation can be addressed in a single appointment with the attorney. Estate planning with a Revocable Living Trust requires more complex planning and is not included in the program. However, you may meet with an SECU trust representative to discuss your specific situation before being referred to several local estate planning attorneys.
Once your RLT is drafted by your attorney, it must be funded. Your RLT can be funded with all of your assets, or as little as $1. Your attorney can assist you with recommendations about what assets should be placed in your RLT. Your attorney can also advise whether or not you may need a Durable POA that allows someone else to add assets to your RLT in the event that you become incapacitated.
Trusts are not just for the wealthy. Even if you have only accumulated a moderate amount of assets over your lifetime, an RLT may be a beneficial part of your estate plan. While an RLT is not a solution for everyone, it offers flexibility and control and can be tailored to fit your specific needs. SECU Trust Services offered through Members Trust Company can help you determine your specific estate planning needs. After discussing your specific situation with you, we can help refer you to an attorney to determine if an RLT is a suitable estate planning tool for you.