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In Wisconsin, a revocable trust, also called a living trust, is a trust that can be modified and updated until the settlor dies. Revocable trusts are commonly used in estate planning because they are flexible, help to avoid probate, and create privacy for assets. The three parties in a trust are the settlor, the trustee, and the beneficiaries.
A revocable trust is one option as part of an estate planning solution. It’s a legal entity that manages and distributes assets. The primary purpose of a revocable trust is to control the transfer of assets to heirs or beneficiaries. Because it is revocable, it can be modified or revoked by the creator (settlor) any time during their lifetime.
Revocable trusts in Wisconsin can be more detailed in their asset management and distribution than a will, which is particularly helpful in cases of minor children, assets with shared ownership, and other situations.
A revocable trust is one option as part of an estate planning solution. It’s a legal entity that manages and distributes assets. The primary purpose of a revocable trust is to control the transfer of assets to heirs or beneficiaries. Because it is revocable, it can be modified or revoked by the creator (settlor) any time during their lifetime.
Revocable trusts in Wisconsin can be more detailed in their asset management and distribution than a will, which is particularly helpful in cases of minor children, assets with shared ownership, and other situations.
A revocable trust allows families to avoid probate and provides more privacy, as assets and beneficiaries remain private instead of public record. Probate can be expensive and time consuming. It is also a stressful process for the grieving family. Trusts streamline the transfer of assets without everything needing to go through probate.
Trusts can also allow for planning in the event of the settlor becoming incapacitated during their lifetime, avoiding family needing to petition the court for guardianship or conservatorship.
Revocable trusts also offer greater control over asset management and distribution and are particularly helpful in managing complex assets. The person creating the trust can retain control over all their assets for as long as they wish, until they are incapacitated or deceased.
There is also greater flexibility and continuity in how assets are distributed to heirs when a revocable trust is used. For instance, young adults can be given periodic distributions instead of a lump sum. The trust can protect and manage assets for minor children until they reach a specified age.
Setting up a trust is a bit more expensive than just having a will. However, that cost is often recouped by the family by avoiding probate. Revocable trusts also don’t offer immediate tax benefits and don’t protect the settlor from creditors or lawsuits. If those are your primary concerns, there are other estate planning vehicles to look into. An attorney like those at Grieve Civil Law can advise what works best for your situation.
Trusts require updating as circumstances change. For instance, new assets need added to the trust as they are procured throughout the settlor’s life. Also, a revocable trust won’t help individuals protect assets from creditors or Medicaid spend down requirements.
There are several key steps to setting up a revocable trust:
An attorney from Grieve Civil Law will discuss with you what you want the trust to accomplish to ensure you are using the best estate planning option for your needs.
Some things to think about in advance are:
Then a trustee must be appointed. Initially, this is often the person who is setting up the trust, since revocable trusts allow settlors to retain control over the trust’s assets. However, a successor trustee still must be named to take over in the event the settlor passes away or becomes incapacitated.
The trustee should be someone competent and reliable. They will be responsible for managing and distributing the assets in the trust in accordance with the trust’s instructions. If desired, you can also hire a professional to fill this role.
Our attorneys at Grieve Civil Law will draft the trust to ensure it complies with state laws and it contains all the specific instructions necessary for your wishes to be carried out. Instructions can include how assets are managed while you are still living, and how they get distributed among your heirs after you pass. Once it is drafted to fit your needs, it needs signed and notarized to be legally binding.
Identify what assets should be in the trust. This could include real estate, business interests, investments, bank accounts, and personal property. It can also include life insurance policies or retirement accounts, though it is generally recommended to have those paid out directly to beneficiaries to avoid paying taxes unnecessarily.
Those assets must be transferred into the trust. If this step is skipped, the assets may go into probate. How the assets are transferred depends on the asset type, but our attorneys will give you instructions on how to transfer all of your desired assets into your trust.
As your assets and life circumstances change, you want to ensure the trust is kept updated. This can include transferring new assets to the trust or updating the instructions for distributions as minor children grow into responsible adults.
There are a lot of legal, financial, and administrative details that need to be handled correctly for a trust to be valid and to perform its intended purpose. While it is technically possible to set one up yourself, it’s not advised due to its many complexities.
Templates or online forms may provide generic solutions, but the expertise of an attorney can help identify customized solutions for your specific needs. Blended families, minor children, anticipated medical needs, complicated assets, and other specific circumstances could all affect an attorney’s recommendation on which estate plan options are best suited for your needs.
The trustee is responsible for managing the trust’s assets and distributing them in accordance with the trust’s terms and instructions. They have the legal and fiduciary obligations to the trust, to ensure assets are managed prudently and distributed correctly.
Their ongoing duties include managing trust expenses, such as property taxes or costs associated with the specific assets within the trust. Trustees manage investments within the trust. They are also responsible for keeping detailed records of financial transactions.
Setting up a trust can be a complicated process. Contact our attorneys today for the guidance you need to set up your trust.
