A Flexible Planning Option

It is essential that you have an estate plan regardless of the size of your estate.  It is also the only way to make sure the stewardship of your accumulation will continue, as you desire, after your death.  Your estate plan can be carried out through a will or through a revocable living trust. Another reason to have an estate plan is to be sure that there is provision for the management of your assets if you are unable to manage them yourself.  This can be accomplished with a durable power of attorney or a revocable living trust.  The revocable living trust is the most flexible estate-planning tool in existence today.  The living trust can provide estate continuity to benefit you and your heirs, and for organizations and ministries you want to assist.

Important Terms
There are several terms you will want to become familiar with as you learn more about revocable living trusts׃

Revocable means the estate owner can revoke, alter or amend the trust at any time.  You stay in control because you can amend or revoke the trust should your situation change.

Grantor is an individual who establishes the trust.

Living Trust is a trust established by a grantor during his/her lifetime.  This is the opposite of a testamentary trust, which becomes effective at death.

Trustee is the person or institution responsible for managing a trust.  The trustee holds fiduciary title to assets, but is required to manage those assets in accordance with the terms of the agreement.

Successor Trustee is the person or institution that fulfills the trustee’s duties in the case of disability, death or resignation of the trustee.

Revocable-Self Declaration Living Trust is a trust established and managed by the grantor of the trust.  The purpose of the trust is to distribute the grantor’s estate at his or her death while avoiding probate.

Advantages of the Revocable Living Trust
Using a revocable living trust in your estate plan allows you to avoid probate and the problems that are sometimes associated with it.  Other key advantages include:

  • Reduction of administrative costs;
  • Speeds estate distribution;
  • Avoids interruption of income to heirs at grantor’s (estate owner’s) death;
  • Provides for the private distribution of estate;
  • More difficult to challenge than a will;
  • Capability to transfer management without court involvement if grantor becomes incompetent;
  • The potential for greater diversity and security for investments if a corporate trustee is used.

The Living Trust Does Not:

  • Reduce income or estate taxes.  It can, however, establish and fund trusts that do save estate or income taxes at death;
  • Eliminate the need for a will since disposition of assets not included in the trust must be provided for in what is usually called a pour-over will.

Establishment of the Revocable Living Trust
A trust agreement must be drafted by an attorney and signed by the principals involved.  The trust is funded by transferring a title to the trust during life.  Probate is avoided only to the extent that assets are transferred to the trust.  Thus it is important to transfer title of all of your assets to the trust.  Assets without a title can be transferred with a bill of sale or by assignment.

The Revocable Living Trust and Christian Stewardship
You can benefit The Baptist Home in your revocable living trust in several ways including:

  • Leaving a percentage of the remainder of your trust to The Baptist Home;
  • Leaving a specified amount to The Baptist Home;
  • Establishing a trust which provides for family members during their lifetimes and then distributes to The Baptist Home;
  • Leaving assets to The Baptist Home in exchange for a Gift Annuity for a loved one.

If you want more information about the Revocable Living Trust, please contact The Baptist Home.