If you’re reading this, you’re likely wondering whether you should have a last will and testament or a revocable living trust in your estate plan. They both perform a similar function: they allow you to distribute your assets to your loved ones after you pass away. Legally, they do this in different ways. For many, a revocable trust is a better option because of the added benefits it provides. Before you get started on your estate plan, consider the following ways a revocable trust can benefit you, as well as meet your family’s needs.
1. Why a Revocable Living Trust Is the Best Way to Avoid Probate
One of the primary reasons individuals set up a revocable trust is to avoid probate. Probate is the legal process your estate goes through after you pass away in which a court reviews your will, determines the value of your property, and then authorizes your executor (person responsible for carrying out your wishes) to pay all debts and taxes and distribute your remaining assets to your beneficiaries. No one likes probate: it is expensive, time-consuming, and intrusive. On the other hand, by creating a trust, you can transfer ownership of your assets to the trust, which means they don’t go through probate and can be distributed quickly and easily to your heirs.
2. Protecting Your Privacy: The Power of a Revocable Living Trust
When a will goes through probate, it becomes a public record. This allows anyone to go down to the courthouse and read your last wishes. Some states even allow online access to these records. On the other hand, a revocable trust is a private document between you and the parties involved. Therefore, you get to protect the privacy of your estate and your beneficiaries. This is especially useful
when knowledge of your estate might allow others to take advantage of your beneficiaries.
3. A Trust Can Provide More Control and Flexibility
A Revocable Trust gives you complete control over your assets – before and after your death. During your lifetime, you can be the grantor, trustee, and beneficiary of the Trust. By assuming all three roles, you maintain complete control over your assets. This means that you can still buy, spend, invest, add property to the Trust, sell property owned by the Trust, and add or remove beneficiaries just as you would without a Trust. Because you’re the grantor, you also reserve the right to amend to revoke the trust at any time during your lifetime. This enables you to revise the trust if your circumstances change, such as marriage, divorce, disability, etc. A trust can also be designed to payout assets to beneficiaries immediately upon death, over time, or when the beneficiaries reach certain conditions.
4. A Trust Can Help if You’re Incapacitated – A Will Doesn’t
A major limitation of wills is that you must die first: if you’re incapacitated, a will has no legal effect. On the other hand, a trust allows you to name a successor trustee to manage your assets during your lifetime should you become incapacitated, thereby avoiding the need for any court involvement. This is especially important for people who are single and don’t have any children. The successor trustee will also make sure your bills are paid, taxes filed, and that your loved ones are provided for financially while you’re alive.
5. A Trust Can Help Protect Minor Children
If you have minor children, a revocable trust can provide peace of mind by allowing you to name a trustee to manage the assets on their behalf until they reach adulthood. This can ensure that your
children and provided for financially and that their inheritance is not wasted or mismanaged. The trustee is responsible for managing the assets in the trust, investing them wisely, and distributing them to the children according to the terms of the trust.
Overall, a revocable trust can provide your loved ones with a piece of mind and certainty that your wishes will be carried out after you pass. Although a will can do the same thing, a revocable trust does have some added benefits. It’s important to note that a revocable trust may not be necessary or appropriate for everything. The decision to set up a revocable trust should be based on your individual circumstances and goals. Take the first step and call our office today!