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Unsworth LaPlante, PLLC

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Vermont: (802) 879-7133

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Home » Resources » Frequently Asked Questions » Revocable Living Trust FAQs

Revocable Living Trust FAQs

    • Trusts are only for the wealthy, right?

    • This is probably the most widely held estate planning misconception. There are trusts that are used by high net worth individuals that have estate tax concerns. A person in this position would convey assets into an irrevocable trust to remove them from their estate.

      However, there is another type of trust called a revocable living trust that can be the ideal choice for a wide range of people that are not multimillionaires.

    • Do you have to give control of the trust to a trustee?

    • You would act as the trustee if you establish a revocable living trust, so you would have total control of the assets in every way. In a real sense, there would be no difference in your ability to access any and all assets that you sign over to the trust.

    • What happens if I become incapacitated late in my life?

    • This is a good question that a lot of people don’t ask because they don’t want to think about the subject. Indeed, Alzheimer’s disease strikes over 30 percent of the oldest old, and this is not the only cause of cognitive impairment.

      One of the benefits of a living trust is the ability to prepare for possible incapacity. You can name a disability trustee that would assume the role if it ever becomes necessary.

    • Is the disability trustee the same person that would become the trustee after my passing?

    • It can be, but this is not a requirement. You can name a successor trustee to assume the role after your death, and you can have a different disability trustee. It’s entirely up to you.

    • What if I don’t know anyone that is qualified to be the trustee?

    • Under these circumstances, you could utilize a professional fiduciary. Trust companies and the trust departments of banks provide trustee services for a fee.

      Even if you do know someone that could potentially act as the trustee, a professional can be a better choice in some cases. There would be no longevity concerns, and the trust would be properly managed by a financial expert that with no personal entanglements.

    • Does a court get involved in the administration process?

    • A lot of people think this may be true because they have heard that a will is admitted to probate, which is a costly and time-consuming public court proceeding. One of the best things about a living trust is the fact that the probate court is not involved.

      After the passing of the grantor of the trust, the successor trustee can distribute assets to the beneficiaries outside of probate.

    • Will the beneficiaries get lump sums all at once?

    • You dictate the nature of the distributions when you create the trust agreement. If you have concerns about the money management capabilities of the beneficiaries, you can include a spendthrift provision.

      The trust would become irrevocable after your passing, and the beneficiaries would not be able to directly access the principal. Because they would have no access, their creditors would not be able to reach the assets, so there would be built-in asset protection.

      When you are setting the terms, you could instruct the trustee to distribute a certain amount each month for a prescribed period of time until the beneficiaries reach certain age thresholds.

      This is just one possibility, but you could set any terms you feel comfortable with when you establish the trust.

    • Can you create a shared living trust with your spouse?

    • Yes, you and your spouse can create a joint living trust. You and your spouse would act as co-trustees, and the surviving spouse could become the sole controller of the jointly held assets.

      The reciprocal arrangement could be in place for separate property as well, but this is not required.

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Essex Junction, VT

26 Railroad Ave
Essex Junction, VT 05452
United States (US)
Phone: (802) 879-7133
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