Revocable Trust
Candlefocus EditorThe primary benefit of a revocable trust is that since it is a separate legal entity, it enables the grantor to keep their estate out of probate court proceedings and guardianship or conservatorship proceedings. This process can be extremely lengthy, costly and time consuming and placing assets into a revocable trust helps avoid the need for probate court proceedings.
The grantor is allowed to change the instructions and parameters of the trust or remove assets from the trust during their lifetime. This means that not only can they decide who they want to benefit from the trust and how they will benefit, but they can also choose to take the funds out if they decide they need them for any reason.
The grantor may also name themselves successor trustees, meaning that the trust can continue to be managed and administered in the same manner should the grantor become disabled or pass away. This continuity of management allows the trust to remain in effect and continue to benefit the intended beneficiaries.
Since the trust is revocable, it does not require a will in order to properly disburse the assets held in the trust. However, a will may be advisable as it is the most secure way to ensure that any remaining assets are properly disbursed according to the deceased's wishes in the event that all of the assets in the trust have been distributed before the deceased's time of death.
Creating a revocable trust can be beneficial in managing and distributing your estate, but there are some costs associated with the process. It is important to consider these costs when determining whether or not a revocable trust is the right option for you. You will need a lawyer to outline the documents that need to be drafted, as well as any fees charged to set up a trust in your state. Further, you will need to properly fund the trust by transferring the ownership of all of your assets from your individual name into the trust’s name– an administrative process which is usually managed by the lawyer who is creating the trust for you.
Overall, a revocable trust is an attractive option for estate planning because it avoids the costs and time associated with probate court proceedings, and it allows the grantor to remain in control of their assets. However, upfront costs related to setting up the trust still exist and it is not a substitute for creating a will.