Revocable Living Trust
A Revocable Living Trust should be the foundation of your estate plan. It contains your instructions for your own care and the care of your family should you become disabled, as well as instructions for the administration of your estate and the distribution of your assets upon your death. Your Living Trust allows you to keep your instructions and financial affairs private and assures that your instructions are carried out efficiently without unnecessary delay or court involvement. But a Living Trust can only accomplish these objectives if you transfer assets to your trust during your lifetime, or you make your Living Trust the beneficiary of your assets upon your death, as is often the case for retirement plans and life insurance.
As its name implies, the trust is entirely amendable and revocable by you at any time. It is called a "Living Trust" because it is created while you are living, as opposed to a trust which is created only upon your death. While you may amend or revoke your Living Trust at any time, you must do so through a written instrument that complies with all the legal requirements for amendment or revocation. Any attempt to amend or modify your Living Trust without observing the legal requirements for doing so may not be legally effective and may result in confusion and litigation among your loved ones. The transfer of assets to your Living Trust creates no income tax consequences during your lifetime and will not affect your income tax preparation and filing until after you pass away.