Estate plans are very different and vary based on the individuals who make them. When making an estate plan, every person is different and so are the assets they have accumulated, this means each estate plan should be custom tailored. Among the different kinds of estate plans, trusts tend to be one of the common factors, and you will find that there are many different kinds of the trusts to fit different requirements when it comes to estate planning. One such popular kind of Trust is the Revocable Trust.
What is Revocable Trust?
A revocable trust is one kind of agreement that indicates how the property of a person can be managed and distributed in their life or after they are no longer around. There are many benefits of a revocable trust and one such benefit is it avoids probate. Probate is the comprehensive and highly time-consuming official process where the court determines how one can distribute an individual’s assets after his or her death.
One more benefit of a revocable trust is it helps in guarding your privacy. A Will which is probated becomes public record and a revocable trust stays private and to many this can play a big role. Furthermore, if you become incapacitated and have a trust established, your descendant trustee can potentially just take over your asset management. Let us look at the pros and cons to get complete details on revocable trust:
Pros of Revocable Trust
Allows you to avoid probate
After your death, your assets that are held in a revocable trust will bypass probate. Confused? Let me explain to you in detail, it means that they will pass to your heirs easily without putting all your assets through the probate procedure with courts that will be troublesome, costly and time-consuming. Your beneficiaries may take over without any court oversight.
Gets protection from court challenges
There are hardly any challenges when it comes to a revocable trust and even if there are it is very difficult if not close to impossible to change anything once you are no longer around. A Will has to undergo Probate and this leaves room for someone to contest it. Setting up a Revocable Trust is one of the best ways to insure that your true wishes for pass through of assets are met.
Makes you organized
Suppose you’re interested in creating a Revocable Trust, it is a good opportunity to get yourself organized and simplify asset distribution or asset research for your loved ones. Most people tend to keep their business and assets private and therefor at times neither ones spouse nor do their kids know of all the assets that they have accumulated or of all the investments that that they have made. Creating a revocable trust which discloses all your assets and investments as well as how they should be distributed is a great idea.
Keeping Assets Private
Probate is a public process and anyone who wishes to do so can follow along. Do you have several children yet wish to leave more to one versus the other? Creating a revocable trust would be the best way to keep everything private when it comes to what you leave behind, this can potentially help avoid a family feud. Also as mentioned before it is the best way to avoid Probate and the potential of family member contesting your wishes and turning this in to a long and costly court battle.
Cons of Revocable Trust
Whereas many people will agree that pros of a revocable trust will outweigh its cons, but still you need to know there are a few disadvantages that you need to be aware about. So, let us have a close at them:
If you compare it to a will, then you are paying a little more upfront in making the revocable trust. However in the long run it will save your estate time and money by avoiding Probate and with potential tax savings.
Can take time for funding
Funding is the process of moving your current assets or retitling them into the name of the trust. You will have to contact a title company if you own real estate to re deed your property into the name of the trust as well as your insurance company to name your trust as beneficiary just to name a few examples.
Dealing with a Trustee
If you do not have a close family member or friend that you can trust to act as your trustee then you may run into some costs associated with a company that renders such service. These fees can potentially chip away over the years at the overall estate.
Thus, a Revocable Trust is one of the most helpful estate planning tools. Take some time to educate yourself on the topic by reading up online or speaking with an Estate Planning Lawyer. Our office offers potential clients the initial consultation free of charge. Call us today to learn more about how a Revocable Trust can benefit you.