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What is a Revocable Living Trust?

Trusts and wills, while often spoken of together, are completely different. Where a will only really comes into play after your passing, a trust is something that operates during your lifetime. One of the biggest differentiators between the two is a procedure known as probate - the legal transfer of one's property after he or she has died.

You may have heard that probate is expensive and it surely can be. A trust allows you to get around this sometimes costly procedure and pass more property on to your family and loved ones. On the other hand, wills are always subject to probate.

Trusts are, at their base, a property management tool. Say you live in New Jersey, but have property in both Montana and Wyoming. You want to protect this property for future generations without completely giving up control of it.

Setting up a revocable living trust allows you to put that property into a trust, managed by a "trustee" of your choosing. This individual operates based on your specific instructions and, after your passing, may distribute the property in the trust. The trust is revocable, which means that you can make changes to it during your lifetime.

Say your youngest son proves to be somewhat untrustworthy. You can remove him as a beneficiary of the trust completely or simply adjust the stipulations written into the trust.

For its many benefits, trusts do have some potential downsides. In the end, what you choose to do with your property is completely you choice. However, before making any definitive decisions, consider seeking the council of an experienced estate planning attorney.

He or she should be able to assist you by, not only setting the trust up, but clearly explaining your options and offering advice.

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