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For Americans navigating estate planning, a revocable living trust may be the first place to start.<\/p>\n
A revocable living trust is \u201cthe most common tool used by estate planners and represents a fundamental building block for most estate plans,\u201d according to George Pennock \u2014 director of tax, trust and estates for Schwab Wealth Advisory (1).<\/p>\n
Consider John, a married, 78-year-old father of three who\u2019s getting his financial affairs in order. His situation reflects that of countless retired Americans who begin drafting their wills and trusts before their passing.<\/p>\n
John is preparing now to spare his family stress down the line. He knows how messy probate can be.<\/p>\n
When his father died, his family spent the next year dealing with lawyers and trying to work through the chaotic and complicated estate process. The situation caused tension between him and his siblings, and John eventually realized the problem could have been avoided if his father had set up a living trust.<\/p>\n
So after weighing his options, he\u2019s setting up a revocable trust, which gives him the flexibility to change the terms at any time during his life.<\/p>\n
An irrevocable trust, by contrast, is set in stone once it\u2019s signed \u2014 but can reduce the tax liability of his estate.<\/p>\n
Now he must decide what belongs in it, and what doesn\u2019t. Here are tips for building your living trust, along with five assets to keep out of it.<\/p>\n
Living trusts are usually a simpler option for loved ones than leaving them to deal with a long, drawn-out probate process.<\/p>\n
Unfortunately, many folks don\u2019t even know what \u201cprobate\u201d means until they\u2019re in the thick of it.<\/p>\n
Sometimes, not always, when a person dies \u2014 even if they left a will \u2014 a legal process called probate ensues. Probate is required to validate the will, name an executor to administer the estate if there isn\u2019t one already named, pay off liabilities and distribute the remaining assets to heirs.<\/p>\n
The process can take years, requiring piles of paperwork and ongoing legal fees.<\/p>\n
For instance, after Ozzy Osbourne passed away in July 2025, reports began surfacing that his $220 million estate would face hefty inheritance taxes and a lengthy probate process (2). According to a Hello! magazine interview with estate planning attorney Gideon Alper at Alper Law, \u201cIf Ozzy\u2019s assets were left in trust, his family could inherit faster and privately (3).\u201d<\/p>\n
In John\u2019s case, a trust could have helped his family avoid probate, protect their privacy and minimize estate taxes when his father died. A trust is a legal document that allows you to retain control of your money and property and designate who will receive what after you die.<\/p>\n
The benefits can also extend beyond death. Pennock of Schwab Wealth Advisory notes, \u201cAnyone concerned about facing a stroke, dementia or Alzheimer’s may want to consider using a trust to help ensure their resources are preserved, managed and spent in line with their wishes.\u201d<\/p>\n
Read More: I\u2019m almost 50 years old and don\u2019t have retirement savings. Is it too late to catch up?<\/a><\/p>\n Read More: Non-millionaires can now invest in this $1B private real estate fund starting at just $10<\/a><\/p>\n Before we get into living trusts, it\u2019s worth looking at an even simpler way to help your children live more comfortably after you pass.<\/p>\n Life insurance can be a faster and smoother way to ensure your loved ones are financially protected when that happens. But not all life insurance policies are made equal \u2014 so make sure you find one from a provider you trust, with premiums and payouts that align with your financial objectives.<\/p>\n For instance, Ethos<\/a> offers term life insurance, is rated \u201cExcellent\u201d on Trustpilot and has an A+ rating from the Better Business Bureau (BBB). Ethos offers simple, affordable coverage for a set period of time \u2014 typically 10 to 30 years.<\/p>\n As a licensed third-party insurance administrator, Ethos has joined forces with some of the industry\u2019s top insurance carriers, such as Banner Life, TruStage Financial and Ameritas Life Insurance.<\/p>\n You can get coverage in just 10 minutes online<\/a> or by phone and guaranteed approval even if you have pre-existing health conditions. Even better, rates can start at just $9.80 per month.<\/p>\n Ethos also gives you the flexibility to select coverage amounts ranging from $2,000 to $100,000<\/a>, depending on your needs, so you know exactly what you\u2019re getting. And unlike the waiting time you might expect through probate, life insurance is typically paid out within weeks or months \u2014 not years. That means your children get support sooner rather than later.<\/p>\n Clearly, even wealthy individuals like Ozzy Osbourne can get it wrong. That\u2019s why it\u2019s important that John meets with a qualified and regulated financial professional to ensure he\u2019s not making mistakes with his estate planning.<\/p>\n A financial advisor can help crunch the numbers and build a plan that works.<\/p>\n But hiring an advisor can be a lifelong commitment, which might make or break your retirement. That\u2019s why finding reliable advisors is crucial.<\/p>\n That\u2019s where Advisor.com<\/a> can come in. The platform connects you with an expert near you for free.<\/p>\n Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.<\/p>\n Just enter a few details about your finances and goals, and Advisor.com\u2019s AI-powered matching tool will connect you with a qualified expert<\/a> best suited for your needs based on your unique financial goals and preferences.<\/p>\n Finding the right advisor isn\u2019t always easy \u2014 there\u2019s no one-size-fits-all solution. That\u2019s why Advisor.com lets you set up a free initial consultation<\/a> with no obligation to hire to see if they\u2019re the right fit for you.<\/p>\n Once you\u2019ve got the right financial advisor in your corner, the next step is getting a clear picture of where your money\u2019s actually going. That starts with the basics \u2014 budgeting and tracking your spending.<\/p>\n Here are five items to consider leaving out of a revocable living trust \u2014 and what the consequences might be if you keep them in.<\/p>\n Vehicles: Whether it\u2019s a 1963 Corvette, a Harley chopper or a prop plane \u2014 all that\u2019s required to pass it on is a simple written instruction to transfer the title to a beneficiary. But if it\u2019s held in a trust, your estate could be vulnerable to lawsuits over accidents involving the vehicle.<\/p>\n Annuities and retirement accounts: A trust can turn non-taxed accounts into taxable ones. However, you can \u200bmake the trust itself the beneficiary so that these accounts pass directly to your trustees without an IRS agent crashing the wake.<\/p>\n Life insurance: You don\u2019t need to put life insurance in a revocable trust. Rather, you can simply name your beneficiaries within the policy or create an irrevocable life insurance trust (ILIT) to avoid estate taxes.<\/p>\n Assets held in other countries: This gets complicated, as you may not be permitted to place international assets in a trust. To find out if it\u2019s possible, you’ll need to consult an estate attorney licensed in the country where your assets are located.<\/p>\n Checking and savings accounts: If you use these to pay monthly bills, you may run into financial complications unless you\u2019re the trustee and have been granted full control of the trust assets. There’s a much easier route: keep these accounts out of the trust.<\/p>\n As a note, the information in this article does not constitute legal advice. Talk to a trust lawyer, financial adviser or other professional in your state before making any decisions \u2014 your family will be grateful you did.<\/p>\n Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n Schwab Wealth Advisory (1<\/a>); Radar Online (2<\/a>); Hello! Magazine (3<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"PeopleImages \/ Shutterstock Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content…\n","protected":false},"author":2,"featured_media":313746,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[114,1125,794,11465,268,156947,85,46,97650,266,267,1124,156945,156946],"class_list":{"0":"post-313745","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-dave-ramsey","10":"tag-estate-planning","11":"tag-estate-taxes","12":"tag-finance","13":"tag-george-pennock","14":"tag-il","15":"tag-israel","16":"tag-living-trusts","17":"tag-personal-finance","18":"tag-personalfinance","19":"tag-probate-process","20":"tag-revocable-living-trust","21":"tag-schwab-wealth-advisory"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/313745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=313745"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/313745\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/313746"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=313745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=313745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=313745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}