Simply put, a revocable trust is used to ensure that your assets are properly distributed at the time of your death.
While there are other options to consider, such as a will, there are reasons why more people than ever are creating a revocable trust.
As the name suggests, a revocable trust can be altered or canceled at any time. As the person creating the trust, you have the opportunity to make as many changes as you want in the future. This is one of the key advantages as compared to an irrevocable trust.
Before you decide for or against a revocable trust, you’ll want to learn more about some of the top benefits. Consider the following:
A Revocable Trust Avoids Probate
This is one of the primary reasons for creating a revocable trust instead of a will. With a will, your estate has no choice but to go through probate. There is no way around this.
With a revocable trust, however, the assets held by the trust are not subject to probate. This means many things, including the fact that your assets can be distributed more quickly to your heirs.
Note: you can name a guardian for your children in a revocable trust, just the same as a will.
Financial Savings
Many people look at a revocable trust and shy away because of the cost. They realize that it takes more money upfront to create this type of estate planning document.
But here is what you need to remember: a revocable trust can save your estate money when you pass on. If you’re looking toward the future, this is something that may have you leaning in the direction of a revocable trust.
Since a revocable trust does not go through probate, court costs are not nearly as extensive. Also, it’s important to remember that revocable trusts often hold up better if somebody comes forward to contest how the assets are being distributed. Once again, this helps save the estate money.
Greater Privacy
While you’re living, you can do whatever it takes to remain a private person. However, once you pass on you lose this control – unless you create a revocable trust.
When a person dies with a will, everything associated with the will becomes public record. In short, this means that others can review every transaction associated with the will.
A revocable trust protects against this as your estate is distributed in private. Rather than worry about others learning more about your situation, a revocable trust allows you to keep everything secure and private.
Incapacity
Along with the benefits detailed above, you also want to learn how a revocable trust can work in your favor while you are living.
For example, if you become incapacitated for any reason, such as a serious illness, your trustee has the opportunity to step in and make key decisions on your behalf. This can provide you with peace of mind that you don’t get with a will.
How to Create a Revocable Trust
Now that you understand the benefits of a revocable trust, it’s time to learn more about creating this type of legal document.
As noted above, it typically costs more to setup than a will. Even so, you need to take a long-term view of your estate plan.
Creating a revocable trust is not something you do on your own. Instead, you should consult with an experienced legal team who can review your situation, answer your questions, and help you create a trust that is 100 percent legal.
If you have any questions about estate planning, including those associated with creating a trust, we urge you to attend one of our seminars in the near future.
It doesn’t cost a dime to register and take part in the event. During this time, you can sit back, listen to our legal professionals, and learn more about many aspects of estate planning. Along with this, you also have the opportunity to ask questions if anything is on your mind.
Once the event comes to an end, we are more than happy to setup a personal meeting during which we can discuss your situation and the steps you need to take.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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