What is a revocable living trust

Qualifications for medicaid

A revocable living trust is a legal document executed by the grantor. It is one of the two types of living trust, the other one being the irrevocable living trust. A revocable living trust, also known as inter vivos and living trust, is similar with a will in a sense that the grantor specifies what he wants to do with his finances. At the same time, it is different because it also specifies what the grantor wants to do with his healthcare and legal affairs in case he becomes incapacitated. It is also different with the will in the sense that the will takes effect only after the death of the person. The revocable living trust on the other hand takes effect even when the person is still alive. He can also change it anytime he wants, hence it is called revocable living trust. A lot of people execute a revocable living trust because of its many advantages.

First, a revocable living trust is less costly than a will. This is in fact one of the reasons why a lot of people have them instead of a will. With it, one can avoid going to probate court. A probate is the process of transferring the estate or properties of the person to the heirs. This involves establishing that the will is valid, inventory and appraisal of the property of the deceased, paying the debts and taxes of the deceased and finally distributing the property or the remainder of it to the heirs. This can be quite costly since it involves paying the lawyers, court fees and taxes, such as estate tax. With a living will however, such as with credit shelter trust, when the grantor dies, the assets are automatically passed on to the beneficiaries without going to court.

Second, the revocable living trust also includes not just the financial or estate management of the grantor but also his Medicaid trust or medical care or management. In case something happens to the grantor, he states who should make medical decisions on his behalf or the type of treatment and interventions that he wants to receive or refuse. This is very important because it ensures that the wish of the grantor is fulfilled even if he is no longer capable of communicating his wishes or capable of making decisions.

Third, it is more private compared with a will. Once the will enters into probate, everything becomes public record. For those who want to keep their financial affairs private, this is the best option. No one will know how much one is worth and his business. For additional revocable living trust information, there are many resources on the internet that you can use. They provide more comprehensive information on revocable living trust. Since different states have different laws on living trusts, it is best to read the ones applicable on your state.

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