What Is a Revocable Trust?
Feb. 1, 2019
Sometimes, we have no idea that something could be beneficial to us because we do not understand it. Fortunately, in the case of estate planning documents, there are estate planning attorneys who can explain what each document does. Once you gather information about what different estate planning documents can do, you can decide, with the help of your estate planning attorney, which of those documents will help you accomplish your estate planning goals.
It’s possible that one of the documents you may want to include in your estate plan is a revocable trust. A revocable trust is a versatile estate planning document that can help you accomplish many different estate planning objectives. For example, one very common estate planning goal is to avoid probate. The assets placed in a revocable trust pass outside of probate. When assets pass outside of probate, beneficiaries enjoy savings in money and time. Perhaps even more importantly, they receive the benefit of privacy, which is in contrast to the public nature of the probate process. A revocable trust can also help to simplify things for people who own property in multiple states, each which would require an ancillary probate estate to be opened after the property owner’s death. No ancillary estates are needed for property held in a revocable trust.
The provisions of a revocable trust take effect upon the grantor’s death, so if you incorporate a revocable trust into your estate plan, you’ll want to be sure that you name one or more successor trustees who will manage the trust after you pass away. Revocable trusts also provide flexibility for the settlor, who can hold and use any number of assets outside of the trust until their death with the knowledge that those assets will flow into the trust upon the event of their death. While we’re on the topic of flexibility, revocable trusts can contain provisions for as many beneficiaries or classes of beneficiaries that you would like to create. You can even establish arrangements for the benefit of charities or other entities.
In addition to the freedom to choose the types of beneficiaries you desire for your trust, There is much room for creativity when it comes to specifying distribution schemes for the assets in the trust. Trust provisions can provide lifelong streams of income for beneficiaries, they can give lump sum gifts, and they can specify how assets are to be managed. Your estate planning attorney can help you understand what types of distribution schemes would be most beneficial based upon your estate planning needs and goals.
Revocable trusts can protect and preserve your assets after your death. While a revocable trust does not protect against creditors to the settlor during their lifetime, assets in the trust can be protected from creditors of the beneficiaries as well as from divorcing spouses and even lawsuits. These protections are only available if you write them into your trust correctly, so be sure to work with an estate planning attorney when you create your revocable trust.
To learn more about revocable trusts and other estate planning documents, call Wichita estate planning attorney J. Joseph Weber today. Alternately, you may contact online for your convenience.