Trust and Estate Forms Tips

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What is the difference between a revocable living trust and an irrevocable living trust?

How Irrevocable and Revocable Living Trusts Differ

Living trusts can be established so that they are revocable or irrevocable. When either type of living trust documents are created, assets are transferred from an individual's name, referred to as the grantor, to the trust. The grantor no longer owns the assets once this happens; instead title lies with the trust. When an individual creates a living trust, the grantor names an individual to serve as trustee over the trust. The trustee can be the grantor him or herself, or another individual.

With a revocable living trust, the grantor has the right to invalidate the trust at any time. When a grantor exercises this right, title to the property of the trust is returned to his or her name. Grantors of revocable trust may choose to alter the terms and provisions of the trust at any time.

An irrevocable living trust is one that cannot be revoked. Once assets are transferred to a an irrevocable living trust, the grantor gives up the rights to take back the assets and to alter any of the stipulated terms or provisions. These types of trusts are often used to set up educational trust funds for minors. They can also be utilized for property settlements resulting from a divorce or other legal action.

What are the most basic components of estate planning?

Top 10 Basic Estate Planning Tips

There are many important considerations when beginning the estate planning process. Each person's family financial situation is different, and estate planning needs may be more complex for some individuals than others. Everyone needs to make sure that their estate planning includes at least the most fundamental elements of a sound estate plan.

10 Basic Estate Planning Tips:

  • Inventory your assets
  • Make decisions about how you would like your assets to be divided
  • Draft your Last Will and Testament
  • Decide who you would like to handle your finances if you become incapacitated
  • Draft your Power of Attorney
  • Determine who you would like to make medical decisions on your behalf if you become unable to do so yourself
  • Draft your Living Will
  • Give a copy of your living will to your physician(s)
  • Determine whether or not a trust will be beneficial to you or your heirs
  • Review and update your estate planning documents regularly

What are the most important estate planning documents?

Must-Have Estate Planning Documents

Regardless of your financial or family situation, trust and estate planning is a very important component of fiscal and personal responsibility. Many people associate estate planning with deciding how your assets will be divided in the event of your death. However, estate planning involves much more than drafting a Last Will and Testament.

It is certainly a good idea to have a Last Will and Testament for the purposes of clearly establishing your wishes regarding property division. However, estate planning should also involve naming someone to make medical and/or financial decisions on your behalf if you become incapacitated. Another important component of estate planning is documenting your wishes regarding medical interventions if you ever become terminally ill or permanently incapacitated.

The following estate planning documents are important parts of any estate planning checklist:

  • Last Will and Testament
  • Living Will
  • Power of Attorney
Completing the proper estate planning documents doesn't have to be expensive or difficult. The Estate Plan Bundle from Rocket Lawyer is a great tool for making sure that you have all the bases covered when it comes to estate planning.

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Sheri Ann Richerson