When it comes to estate planning, there are a variety of different tools that can be used. One option is the revocable trust. A revocable trust can be a great way to protect your assets and ensure that your loved ones are taken care of after you're gone. But what is a revocable trust, exactly? And how can it help you? Read on for more information.
What Is a Revocable Trust and What Are Its Benefits?
A revocable trust is a type of trust that allows the grantor, or person establishing the trust, to make changes to the terms of the trust or revoke it entirely. The grantor retains control over the assets in the trust during their lifetime and can change the beneficiaries, add or remove assets, or cancel the trust at any time.
Revocable trusts are commonly used to manage assets during a person's lifetime and transfer them to beneficiaries after death. This type of trust can be an effective way to avoid probate, which is a court-supervised process for distributing a deceased person's assets. Revocable trusts can also be used to protect assets from creditors or certain kinds of tax liability. However, because the grantor retains control over the trust, it does not provide the same level of asset protection as an irrevocable trust.
A Revocable Trust can be an important part of your estate planning, as it can help to avoid probate and minimize taxes. Additionally, a Revocable Trust can provide asset protection in the event that you become incapacitated or owe money to creditors. If you are looking for ways to protect your assets and ensure that your wishes are carried out after your death, a Revocable Trust may be right for you.
How Do You Set up a Revocable Trust and Who Can Help You Do So?
A trust is setup by creating the documents and then properly executing those documents according to the proper governing laws.
A revocable trust should be created with the help of an attorney. It is important to have an attorney draft the trust agreement to ensure that it meets your state's legal requirements and that all of your assets are properly transferred into the trust. Once the trust is created, you can transfer ownership of your assets into the trust by executing a deed or other document that transfers ownership of the asset from you to the trust. You should consult with an attorney to determine which assets should be transferred into the trust and how to do so.
What Happens to the Trust After the Creator Dies or Becomes Incapacitated?
When the creator of the revocable trust dies or becomes incapacitated, the trust becomes irrevocable, and the assets are distributed according to the terms of the trust. If the creator of the trust is still alive and competent, they can make changes to the trust at any time. However, once the creator dies or becomes incapacitated, the terms of the trust become fixed. This safeguards the assets in the trust from being mismanaged or dissipated by heirs or creditors. The trustee is responsible for ensuring that the assets in the trust are properly managed and distributed according to the terms of the trust. If you have questions about what happens to a revocable trust after the creator dies or becomes incapacitated, you should speak with an experienced estate planning attorney.
Are There Any Other Types of Trusts That Might Be More Appropriate for My Needs?
There are many different types of trusts, and the most appropriate type for your needs will depend on your specific circumstances. For example, if you are concerned about estate taxes, you might consider setting up a trust that will minimize your tax liability. If you want to be sure that your assets will be used for specific purposes after your death, you might consider setting up a charitable trust. There are many different types of trusts, and choosing the right one can be a complex process. If you have questions about whether a trust is right for you, you should consult with an experienced estate planning attorney.
Here is a list of some common trust types:
- Revocable Living Trust
- Irrevocable Trust
- Charitable Remainder Trust
- Special Needs Trust for a Disabled Beneficiary
- Trust for Children or Grandchildren
- Trust to Avoid Probate
- Cabin Trust
- Real Estate Trust
- Bypass or Family Trust
- Dynasty Trust (Generation Skipping)
- Grantor Retained Annuity Trust
- Qualified Personal Residence Trust
- Marital Trust
- and more...
Is a Revocable Trust Better Than a Will?
Trusts and wills are both legal documents that can be used to manage your property and assets after your death. However, there are several key ways in which a trust is better than a will. Often, a pour-over will is used in conjunction with a trust.
One of the biggest advantages of a trust is that it can help to avoid probate. Probate is the legal process of administering a person's estate after their death, and it can be both time-consuming and expensive. However, trusts are not subject to probate, which means that your beneficiaries can access your assets much more quickly.
In addition, trusts offer more flexibility than wills in terms of how your assets can be distributed. With a trust, you can specify not only who will receive your assets, but also when and how they will receive them. This means that you can customize your trust to fit your unique circumstances.
Finally, trusts are more private than wills. Wills are public documents, which means that anyone can request a copy of them. Trusts, on the other hand, are confidential and can only be accessed by the beneficiaries named in the trust document.
For all these reasons, trusts offer a number of advantages over wills when it comes to estate planning.
Contact an Estate Planning Attorney
A revocable trust is a popular estate planning tool that can help you avoid probate and ensure your wishes are carried out after you die. This type of trust can be amended or revoked at any time by the person who created it, which is why it's called “revocable.”
If you want to learn more about this estate planning tool or need help setting one up, please don't hesitate to contact our team at 414-253-8500. We would be happy to answer any questions you have and help you get started with this important process.