What Is a Qualified Revocable Trust?

Revocable Living Trust What Is a Qualified Revocable Trust?

All About a Qualified Revocable Trust

Living trusts (or inter vivos, latin for between the living) are created and activated while the person writing the trust is still alive. This aspect of trusts makes them especially valuable. Keep reading and learn more about qualified revocable trusts, living trusts versus wills, the reasons to pick a living trust, and how DoNotPay can simplify the process and get your estate planning done in record time. 

What Exactly is a Qualified Revocable Trust?

A qualified revocable living trust is a trust created while you are living, that you can modify and revoke any point. The successor trustee (or trustees) will take on the duty of transferring your assets to the correct beneficiaries upon your death, without any personal involvement or bias. 

Different types of trusts

  1. Revocable trusts. These trusts are flexible and changes can be made at any time. The grantor retains ownership of the assets and properties in the trust, so he or she will still be liable for taxes.
  2. Irrevocable trusts. These trusts are set in stone once legalized. The assets and properties in the trust become its own tax entity, so the grantor is not the owner anymore. This shields the grantor from taxes.

Benefits of a Trust vs a Will

Wills and trusts are legal estate planning tools that allow a person to pass their assets to other people (called beneficiaries) when they pass away. While they both serve the same purpose, they differ in the time they become active. Wills become active only after death. Trusts on the other hand, are active once legalized.

Living trusts do not go through probate and the transfer of assets is conducted in a private manner. Wills are official documents that are on public record and must go through the process of probate once the author has died. This process can become lengthy and confusing, especially if the will is contested by members of the family. Here are the purposes of probate:

  1. Make the will available for contestation
  2. Address any contestations to the will
  3. Verify that the will’s author has passed and a death certificate was issued
  4. Verify that the author in question did write the will
  5. Verify that the will is valid, up to date, and the newest possible version

The specifics of probate procedures can vary by state. If you would like to create a living trust instead, refer to this table to find the process for your state:

CaliforniaOhioHawaii
FloridaWisconsinMissouri
TexasMassachusettsPennsylvania
ArizonaNorth CarolinaUtah
MichiganGeorgiaIndiana
ColoradoVirginiaIdaho
AlaskaMarylandSouth Carolina
Washington StateNew JerseyLouisiana
OregonMinnesotaIllinois
New YorkOklahoma

Note that if you own property in multiple states, a trust will prevent you from having to go through multiple probate procedures. 

Summary of trusts versus wills

TrustsWills
  • Active as soon as agreement is signed and notarized
  • Increased privacy
  • Harder to contest 
  • Flexibility: revocable trusts can be amended
  • Probate process is lengthy
  • Property in different states can require multiple processes of probate
  • Can be contested more easily
  • Publicly available on legal record

How to Set Up a Living Trust

If you’ve decided to create a living trust, here’s what the process would look like:

  1. Choose in between a revocable or irrevocable trust. You can also choose to create a single or joint living trust (useful if you have a partner and own assets together).
  2. Identify and create a list of your assets and the beneficiaries. You’ll be deciding which assets go to who. If you have an organization or individual in mind that should receive the remainder of your assets, you can make them residuary beneficiaries. They will receive a portion of whatever is left. Gather copies of the deed for each property that will go in your trust as well.
  3. Name your successor trustee and backup/alternate successor trustee. You can assign co-trustees and have them split the duties or assign them responsibility over different assets. It is a trustees job to:
    1. Manage your assets and make sure each asset transfer goes to the correct beneficiary
    2. Be impartial and treat each beneficiary fairly 
    3. Not use the assets for any other purpose than detailed in the trust
    4. Not benefit themselves from any of the assets 
    5. Keep detailed records 
  4. Figure out how you want to get the agreement drawn up. You can create one on your own, use an online template, hire an attorney, or use DoNotPay!

Use DoNotPay to Create Your Living Trust

DoNotPay’s goal is to make estate planning as easy and smooth as possible, so you can avoid extra stress and fees. Here’s how to get started with us:

  1. Log-in to DoNotPay and go to the Revocable Living Trust service
  2. Assign your beneficiaries and trustees
  3. Add the assets and properties that will go in the trust
  4. Specify who or what should get other personal property
  5. Submit your request, review the document we provide you, and get it notarized!

What Else Can DoNotPay Do for You?

We believe legal services should be affordable, accessible, and easy for everyday people to use. We’re constantly expanding our services and making your life as easy as possible. Check out some of our other services below and knock some tasks off your to-do list!

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