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Make Your Indiana Revocable Living Trust Agreement the Correct Way
A revocable living trust is usually created to manage assets during the grantor's lifetime and to outline how the assets will be distributed upon death. Keep reading for everything to know about Indiana revocable living trust and how to make the agreement correctly.
Revocable Living Trust vs. Testamentary Trust
If you're considering setting up a revocable living trust, it's essential to understand the difference between this type of trust and a testamentary trust.
A revocable living trust is created during the grantor's lifetime, whereas a testamentary trust is made after the grantor's death through their will.
Another key difference is that revocable living trusts can be revoked or changed at any time by the grantor, while testamentary trusts cannot be changed after the grantor's death.
Finally, revocable living trusts are usually used to manage assets during the grantor's lifetime and to provide for the distribution of those assets after the grantor's death. On the other hand, testamentary trusts are typically used for estate planning purposes, such as to minimize estate taxes.
What Do You Need to Make a Revocable Living Trust in Indiana?
First, you should identify the assets or estates you wish to include in your trust. These include:
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Any property, such as houses, cars, land, or jewelry
Bank accounts
Investments, such as stocks, bonds, or mutual funds
Retirement accounts
Next, you will need to choose a trustee. The trustee is the person who will manage the trust and its assets according to your instructions. Ensure to select someone you trust implicitly and who is willing to take on this responsibility.
You may also choose a successor trustee who will take over if the original trustee is unable or unwilling to continue. Finally, identify the beneficiaries who will receive the assets in the trust after your death.
Then, you will need to draft your revocable living trust agreement. This document outlines your wishes for how the trust and its assets are to be managed and distributed. And sign it before the notary public. Finally, you will need to fund the trust by transferring ownership of your assets into the trust.
Do You Need a Will if You Have a Revocable Living Trust in Indiana?
You may still need a will if you have a revocable living trust. This is because revocable living trusts only hold assets that have been transferred into them. Therefore, the trust agreement will not cover any assets you own but have not placed in the trust.
For example, if you own a bank account that is not in the trust, it will not pass to your beneficiaries according to the terms of the trust. Instead, it will go through probate and be distributed according to your Will (if you have one).
Similarly, if you have kids, you will need to name a guardian for them in your Will. You also want to note that revocable living trusts do not cover minor children.
Can You Bypass Probate without a Living Trust in Indiana?
Unfortunately, Indiana has not adopted the Uniform Probate Code, so there is no way to avoid probate in Indiana. However, if your estates are $100,000 and less, you may qualify for simplified probate processes.
You may also leverage the transfer-on-death-deed, which allows you to transfer your real estate ownership to a beneficiary after your death without undergoing probate.
Revocable Living Trust and Estate Taxes in Indiana
Indiana does not have an estate tax, so revocable living trusts will not be subject to taxation. However, the federal estate tax may apply if your estates are valued at over $12 million. And in this case, you may use an AB trust to minimize estate taxes.
Save your loved ones from lengthy and expensive probate with our Indiana revocable living trusts online forms. At Forms.legal, we offer free revocable living trust that you can fill in and download at your convenience.