Charleston Revocable TrustThe name of the revocable trust, or revocable living trust, offers a fairly descriptive glance at its legal character.  As opposed to a testamentary trust, or a trust created by a simple will, the revocable living trust is, first, an inter vivos trust, meaning a trust that the trust is created within a person’s lifetime.  The typical South Carolina estate planning living trust is testamentary in nature, meaning that it is the device by which the creator of the trust disposes of property at death.  At death, the living trust (still in existence for a deceased client) acts, looks, and feels like a Last Will & Testament.

Generally, a South Carolina estate planning trust is revocable, meaning that the creator of the trust, typically called the “settlor,” “trustor” or “grantor,” reserves the right to amend or revoke the trust at any time during their lifetime. The term “revocable trust” will refer to a trust created while the grantor is alive in which the right to revoke is retained by the grantor alone or can be exercised in conjunction with the grantor or solely by another with the authorization of the grantor.  It is clear that without an express retained power to revoke the trust, a trust created during the lifetime of a person will be irrevocable.  The transfer of property or assets to a revocable trust is not a gift because the right to revoke makes the transfer incomplete for transfer tax purposes. At death, the revocable trust becomes irrevocable (just as a will is irrevocable at death), and assets contained in the revocable trust will be included in the taxable estate of the grantor at death. It is important to note that even though assets in the trust will not be included in the grantor’s probate estate, the assets will be included in the grantor’s taxable estate.

The revocable trust is one of the most flexible planning tools available and its non-taxable advantages are numerous. Many problems associated with probate can be effectively avoided through the use of a revocable trust. A person whom engages in estate planning and has established a revocable trust may provide for management of the trust assets in the event of his or her incapacity or that of a family member. A revocable living trust also facilitates the continuous and centralized management of an individual, professional estate planning or family estate planning assets. In South Carolina, our Charleston estate planning attorneys may counsel a family, individual or professional to establish a revocable trust in order to place assets beyond the reach of creditors.

Revocable Trust Benefits

Our Charleston estate planning attorneys often use revocable trusts as a compliment to the will. Revocable trusts allow one to effectuate a dispositive estate plan that, while being legally valid immediately at the trusts creation, has a practical dispositive impact only at a persons death. Therefore, revocable trusts offer two important benefits: 1) retention and control over a persons property during his or her lifetime, with the right to revoke or amend; and 2) an alternative to the simple will for effectuating the dispositive estate plan at death, which serves to avoid the probate process.  A person may fund the revocable trust during his or her lifetime, retaining the right revoke the property and the status of sole beneficiary until death.  Consequently, a person using the revocable trust estate planning vehicle will maintain the most important qualities of property ownership: the right to the benefits of the property as the beneficiary and the right to control the property as the trustee.  Upon death, the revocable trust operates to manage the property in accordance with the person’s directions, much as as a last will and testament would direct the disposition of assets in probate.

Continuity of ownership also may be desired where problems with the clearance of debts, claims or Illinois estate administration expenses are anticipated. Finally, continuous ownership afforded by the revocable living trust is advantageous where liquidity is needed to pay taxes and assorted probate costs.

Revocable Trust For Single or Unmarried and Nontraditional Relationships

As for unmarried or single persons as well as individuals in nontraditional relationships, revocable trusts may be the best alternative of the estate planning options.   A trust will typically be more difficult to contest than a last will and testament (see Will Contests).  Additionally, a revocable trust is private, and its contents and provisions may not be known for quite some time after death.