The revocable living trust is one of the most versatile estate planning tools, and people are often very pleasantly surprised when they learn about the benefits. If you are married, the shared living trust can be the right choice, and we will provide the details here.
No Loss of Control
The first thing you have to understand about a revocable living trust is the simple fact that you lose no control of the assets that you convey to it. You can act as the trustee, so in a real sense, nothing changes.
Technically, the trust would own your property, but you would be the controller of the trust, so there would be no real separation. To underscore this relationship from a legal perspective, those assets would not be protected if you are sued, and they would count as part of your estate for tax purposes.
Plus, this would be a revocable trust, so you would be able to rescind the trust and take back direct possession of the property if you ever choose to do so. We are emphasizing ongoing control because many people think that you completely surrender ownership when you establish any type of trust.
Details for Shared Living Trusts
If you establish a living trust jointly with your spouse, you would act as the co-trustees and you would be the initial co-beneficiaries of the trust. This approach works best if you and your spouse have a good bit of jointly owned property and you want the surviving partner to become the sole owner.
When one person dies, the trust would remain intact, and there would be no reason to retitle the property. The remaining trustee would simply assume individual control of the jointly held assets in the trust.
You can still use a shared living trust even if you and your spouse have separate property you want to leave to others. This would be listed on a schedule, and the terms of the trust would spell out the way that these assets should be distributed after the death of each respective grantor.
It should be noted that one of the benefits that you gain when you use a living trust is the avoidance of probate. A will would be admitted to probate, and the court would supervise the administration process.
Probate is time-consuming, and the inheritors receive nothing while it is underway. There are also innumerable expenses that reduce the value of the estate, and the records are available to the general public.
When you use a shared living trust, the situation is streamlined for all concerned. Of course, some married people have different objectives. It is perfectly possible for each individual to create their own living trust, and this would be a better choice under some circumstances.
Incapacity Planning
While we are on the subject of estate planning for married couples, we should touch on incapacity planning. This type of planning isn’t something most couples want to think about, especially when they’re in good health. However, accidents, sudden illnesses, and other unexpected events can happen to anyone, regardless of age or health status.
If one partner becomes incapacitated, complications can arise of no preparations have been made in advance. That’s where incapacity planning tools like living wills, health care proxies, and HIPAA releases come in handy.
Living Will
A living will is an advance directive that specifically outlines your wishes regarding life-sustaining treatments like ventilators, feeding tubes, and resuscitation, among others. This document provides crucial guidance for medical professionals and spares your spouse the emotional burden of making such life-altering decisions without knowing your preferences.
Health Care Proxy or Durable Power of Attorney for Health Care
In contrast to a living will, a health care proxy or durable power of attorney for health care allows you to name a trusted individual (often your spouse) to make medical decisions on your behalf when you’re unable to do so. This includes choices about surgeries, medication, and other treatments that aren’t necessarily related to life-support measures.
Having a health care proxy ensures that someone familiar with your values and wishes is at the helm, making decisions that align with your best interests. This alleviates confusion and disagreement among family members, who may have differing opinions about your care.
If you name your spouse as your representative, you can add an alternate that would assume the role if your spouse is unable to perform the duties for any reason.
Don’t Forget the HIPAA Release
When it comes to medical records, privacy laws like the Health Insurance Portability and Accountability Act (HIPAA) can be a double-edged sword. While they protect your privacy, they can also make it difficult for your representative to access your medical information during an emergency.
A HIPAA release allows you to grant your spouse – or any other designated individual – the unquestionable legal right to speak with doctors, access medical records, and receive updates about your condition. This can be incredibly valuable for coordinated care and informed decision-making.
The Complete Package
By combining a living will, health care proxy, and HIPAA release, you and your spouse can build a comprehensive incapacity plan. This trio of documents works together to ensure seamless medical decision-making and information-sharing during the most critical and stressful times.
Access Our Estate Planning Checkup
If you would like to learn more about the estate planning process, we have a great tool that you can take advantage of right now. Our firm has prepared an estate planning checkup that you can go through to gain a more thorough understanding of the process.
There is no charge for this valuable resource, so there is no reason to take pause. To get your copy, visit this page and follow the simple instructions.
Take Action Today
Written information is great, but at some point, it is time to discuss your goals with a licensed attorney. If that time is now, we would be more than glad to help you create a custom-crafted plan that is ideal for you and your family.
We know that it can be a bit disconcerting to discuss these personal matters with someone that you have just met. You can rest assured that we have the uncanny ability to put people at ease from the start, so you can set those concerns aside.
You can send us a message to request a consultation at our Bluffton, SC estate planning office, and you can alternately give us a call at (843) 815-8580.
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