Many Tennessee residents are aware of the existence of various types of trusts, but are unsure which trust structure might be right for their unique set of needs. For those who are seeking an effective way to manage the distribution of assets to their intended heirs, a revocable living trust, or RLT, may be a great solution. An RLT is funded in the same way as many other types of trusts, with assets that are titled to belong to the trust itself, and not the individuals creating the RLT.
Once assets are properly placed within the trust, the creators have a great deal of flexibility when it comes to determining how those assets will be passed down to future generations. Assets can be distributed at certain ages, or when heirs reach pre-determined milestones in their lives, such as finishing their education or getting married. An RLT also provides the power to create different inheritance "rules" for different heirs.
For example, a grandchild who lacks motivation can be enticed to perform better in school by means of using the trust distributions as a sort of "carrot-and-stick" program. He or she can be given smaller monthly payments during the college years, with the promise of receiving a greater share of his or her inheritance once a degree program has been successfully completed. It is even possible to tie monthly payments to a pre-determined GPA.
When structuring a RLT, Tennessee families have the ability to control when and how their accumulated wealth will pass on to their intended heirs. These types of trusts require careful planning and periodic review, both of which can be obtained by working with an estate planning attorney. In addition, having a trusted attorney to assist in this process can lead to a more comprehensive and cohesive estate plan than trying to piece together various documents unassisted.
Source: The Wall Street Journal, "Smart Estate Planning Tips for Entrepreneurs", Mark J. Kohler, June 25, 2015