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4 Misconceptions About Revocable Living Trusts

What is a revocable living trust?

A revocable living trust is an arrangement in which a Grantor (the trustmaker) places their assets and property in a trust, which can be updated and revised by the Grantor while they are alive. The trust is then managed by a Trustee, who is tasked with distributing the assets to the beneficiaries of the trust upon the Grantor’s death.

A probate court does not need to distribute assets and property in a trust, because the property and assets have been allocated to the trust. Since assets in trusts are not subject to probate, having a revocable living trust facilitates the distribution of assets by bypassing the probate process, which can be both costly and timely.

If you have considered including a revocable living trust in your estate plan, it is important to be aware of misconceptions that can affect your plan and leave you with a false impression.

Misconception #1: Assets in a revocable living trust cannot be used by the Grantor.

Assets in a revocable living trust can still be accessed by the trustmaker. The Grantor of a revocable living trust has the option to appoint themselves as the Trustee, the person designated to manage the trust. If this is the case, a Successor Trustee may be appointed to manage the trust in the event of the Grantor’s death or incapacitation.

 

Misconception #2: Once a revocable living trust is signed, the Grantor’s assets are automatically exempt from the probate process.

An unfunded trust is still subject to probate. A trust is considered to be unfunded if the ownership titles of the assets are still in the name of the trustmaker.

In order to “fund” a trust, the ownership titles of the trustmaker’s assets must be transferred from trustmaker to the trust. This includes vehicle titles and financial accounts. In the event of the Grantor’s death or incapacitation, the Trustee (or the Successor Trustee) can only manage the assets in a funded trust. Otherwise, the assets may still face probate.

 

Misconception #3: Revocable living trusts are only necessary for those with large estates or many assets.

It is commonly assumed that estate planning tools, like revocable living trusts, are less important for those with smaller estates. However, an estate does not only encompass money and real estate; Estates also include vehicles, electronic equipment, art, and other valuable possessions.

Further, a revocable living trust offers the Grantor flexibility in how their funds and property will be distributed. A Grantor with minor children may prefer to hold funds in a trust, to be dispersed to their beneficiaries in increments.

 

Misconception #4: Revocable living trusts are always the correct option.

Every estate plan is different. Circumstances, family needs, and assets can all have an effect on how one chooses to plan ahead. Some individuals may find a will to be a superior choice for preserving their wishes, while others may benefit much more from transferring their assets into a revocable living trust.

Information in this article is provided for educational purposes only and not intended to constitute legal advice. Please consult with a licensed attorney in your jurisdiction for help with your specific situation.

When it comes to estate planning, navigating your options can have a great payoff. Seeking the guidance of an estate planning professional can offer much-needed assurance and security.

If you would like assistance with estate planning in Maryland or have questions regarding your situation, we invite you to contact the Law Offices of Elsa W. Smith, LLC at 410-995-7719.

 

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10 Tips for Small Business Owners

1. Get Serious About Digital and Physical Organization

Having a streamlined organization system can boost productivity and save you from losing access to important documents. This includes managing your physical files as well as digital data. Consider digitizing records and taking advantage of the myriad online platforms for digital case management and file storage.

2. Familiarize Yourself with Federal and State Employment Laws

For small business owners, staying organized also means being aware of and abiding by employment laws. Take the time to do research on these regulations, which differ by state and vary according to a range of factors, like the number and types of employees.

3. Know How to Choose Team Members

There comes a point where a small business owner recognizes that they could benefit from sharing their workload. Finding the right employees and business partners can help you focus your efforts where they are most needed.

When adding new members to your team, past work experience is not the only factor you should evaluate. Determine the specific set of skills you are looking for and focus on their potential within your business.

4. Outsource Specialized Tasks When Needed

Outsourcing is a viable option for small business owners who are not yet ready to add an employee to their business but would like to delegate tasks or assignments (think timekeeping, payroll, and IT) to a specialist.

5. Take (Calculated) Risks

Some of the greatest successes in history and in business can be attributed to risk-taking. Whether it is in the form of a challenge or new business strategy, taking a calculated risk can set your business apart from the rest. However, risk-taking is not equivalent to improvising; a calculated risk takes into account any possible undesired outcomes. Always have a backup plan in place.

6. Remain Optimistic

Every small business faces stumbling blocks. Setbacks can make success seem unattainable, but the way you handle a difficult situation can unlock constant growth and improvement in your business. If your business hits turbulence, try asking yourself, “What have I gained from this experience, and how will it guide my approach in the future?”

7. Learn When to Say No

In deciding when to decline a request from a potential client or customer, carefully consider your limitations. This includes any workload constraints, prior commitments, or if the request is outside of the range of your expertise.

Profitability is also a deciding factor. It may be difficult to decline work, but do not fail to recognize the financial value of the product or service you provide.

8. Learn How to Say No

When declining someone’s business request, provide them with a sensible explanation for why you are unable to meet the request, and make clear what you do offer. Providing this information can leave you open to future business requests from this person, who may, in turn, send other potential clients or customers your way. As a courtesy, you may assist this person by referring them to a trusted business or resource you believe will meet their specific request.

9. Network with Other Small Business Owners

Networking with other local business owners not only deepens the community bond of your business, but it can be a rich source of support and guidance. Don’t be afraid to branch out!

10. Give Yourself a Break

Operating a small business comes at the expense of extensive time and effort. However, business owners should not devalue the importance of downtime. Whether it’s a weekend getaway or a night away from your cell phone, setting aside time to decompress can benefit you and your business greatly, while providing much-needed insight.

Information in this article is provided for educational purposes only and not intended to constitute legal advice. Please consult with a licensed attorney in your jurisdiction for help with your specific situation.

If you are a business owner in need of outside counsel or you simply want to consult on an as-needed basis with a licensed Maryland legal professional regarding your business, give the Law Offices of Elsa W. Smith, LLC a call at 410-995-7719. Protecting You, Your Family and Your Business

Soy un recién casado con pocos bienes. ¿Cómo puede ayudarme la planificación patrimonial?

Un matrimonio es un vínculo entre dos personas que se han comprometido a enfrentar la vida juntos. Si recientemente se ha comprometido a pasar el resto de su vida con su cónyuge, no hay mejor momento que ahora para establecer un plan de sucesión.

Si bien la preparación para el futuro puede ser intimidante, la planificación patrimonial puede aliviar gran parte de esta incertidumbre. Los recién casados ​​comparten un esfuerzo conjunto hacia el crecimiento y la estabilidad, y la planificación patrimonial es una extensión de este objetivo. Independientemente de los ingresos, el valor de los activos o el estado de los propietarios, los recién casados ​​se encuentran en una posición muy favorable cuando se trata de construir un plan de sucesión. Donde empiezas

Es útil pensar en la planificación patrimonial como una forma de proteger sus activos, posesiones y preferencias médicas. Como tal, los cónyuges pueden compartir esta responsabilidad incluso si tienen pocos activos o no son propietarios. Un error común es que la planificación patrimonial solo abarca bienes raíces. Sin embargo, éste no es el caso. Su patrimonio incluye (pero no se limita a): vehículos motorizados, objetos personales preciados, reliquias y cuentas de inversión.

Los recién casados ​​pueden comenzar (o actualizar) su plan de patrimonio haciendo que un abogado prepare lo siguiente:

Última voluntad y Testamento

Una voluntad bien elaborada puede ser una fuente de alivio para el cónyuge, la familia y los seres queridos sobrevivientes. Incluye los deseos del difunto por la administración y administración de su patrimonio. Las parejas casadas a menudo combinan activos, que pueden cambiar la naturaleza de la voluntad preexistente de un individuo.

Si tiene hijos o planea tener hijos, un testamento es una vía vital para proteger su legado. Las preferencias de herencia y tutela también se pueden describir en su testamento.

Aquellos que tienen un testamento y aún no están casados, pero que planean casarse pronto, son muy alentados a revisar su testamento después del matrimonio. Un cambio en el estado civil es solo uno de los eventos significativos de la vida que justifican la revisión de un testamento. Otros eventos importantes de la vida incluyen cambios en la residencia, la carrera y el estado de los propietarios.

Poder Legal

Tener un documento de Poder notarial en su lugar le permite designar a un agente para que tome decisiones legales, financieras y personales en su nombre en caso de que no pueda tomar estas decisiones por sí mismo. La elección de un agente puede tomar algunas deliberaciones y discusiones con su cónyuge y con la persona que usted decida nombrar. Por esta razón, es crucial comenzar el proceso de planificación patrimonial más temprano que tarde.

Directiva Avanzada

Las directivas avanzadas también son importantes, independientemente del tamaño de su patrimonio. En este documento, puede elegir un agente de atención médica para tomar decisiones médicas por usted. El poder de decisión de su agente de atención médica puede ser limitado o general. Las preferencias médicas específicas, como las órdenes de “No resucitar”, también se incluyen en una directiva avanzada.

Por mucho que tratemos de planificar con anticipación las emergencias, las situaciones imprevistas son inevitables. Al comenzar una nueva vida juntos, usted y su cónyuge deben priorizar su enfoque del bienestar financiero y médico; Estas decisiones importantes no pueden dejarse a la suerte. Aquellos con fincas pequeñas tienen la capacidad de crecer y mantener activos en los próximos años y sentirse cómodos al saber que tienen el control.

La información de este artículo se ofrece solo con fines educativos y no constituye asesoramiento jurídico. Para obtener ayuda específica, consulte con un abogado autorizado en su jurisdicción.

Tener un profesional de planificación patrimonial no solo ofrece una comunicación y una dirección claras, sino que también brinda tranquilidad. Un plan de sucesión es una herramienta crucial para ayudarlo a alcanzar sus metas, tanto individuales como compartidas. Si desea obtener ayuda con la planificación patrimonial en Maryland o tiene preguntas sobre su situación, lo invitamos a contactarnos en las Oficinas Legales de Elsa W. Smith, LLC. 410-995-7719