Legal and planning
Revocable living trust
A revocable living trust is a legal arrangement in which a person places assets in a trust and keeps the right to change it. A trustee manages the assets for the benefit of the person and later for named heirs. The person can cancel it while alive.
Why it matters for your family
The National Institute on Aging lists a living trust among common planning documents. A trust can name a successor trustee to manage money if the person becomes unable. It can also pass assets without a court process, depending on state law. A common mistake is to create the trust and not move assets into it. Another is to assume a revocable trust protects savings from long-term care costs or Medicaid. Usually it does not, because the person keeps control. Ask an elder law attorney how a trust fits your goals and your state's rules. A tax professional can explain tax effects. This is general information, not legal or tax advice.
Source: nia.nih.gov
Read more: What is Elder Law and Do You Need an Elder Care Attorney?
Related terms
- Last will and testamentA last will and testament is a legal document that says who receives a person's property after death.
- Special needs trustA special needs trust, also called a supplemental needs trust, holds money for a person with a disability.
- Beneficiary designationA beneficiary designation names who receives an asset when the owner dies.
- Medicaid planningMedicaid planning is the legal arrangement of income and assets so a person can meet Medicaid rules for long-term care.
- Elder law attorneyAn elder law attorney is a lawyer who focuses on legal issues of older adults.
- Durable power of attorneyA durable power of attorney is a power of attorney that stays in effect if the person who signed it becomes incapacitated.
