Revocable trusts, sometimes known as living trusts, are a becoming a popular estate planning tool for those wishing to keep as much of their property as possible out of probate. While avoiding probate entirely is seldom possible, a revocable trust allows you far more power over your estate and makes it much easier for your beneficiaries to inherit property after your death. To find out if a revocable trust, also called an "inter vivos" trust in legal terminology, can be useful for you when planning your estate, read below for the vital facts you need to know.
What is a revocable trust?
This is a legal document, just like a will, that provides a means to transfer certain assets into a trust while you are living. Stocks, vehicles, real estate, art, jewelry, bonds and more can be placed into the trust. In fact, almost any property that you would include in your will can be instead placed into a trust. Part of the trust instrument even names the beneficiaries of the property placed into the trust.
Similarities to a will.
Just like a will, you can make changes in the trust anytime you wish, including adding more assets and removing assets, changing beneficiaries and even canceling the trust altogether.
You will appoint a trustee for the trust account whose responsibilities are similar to an executor or personal representative, who will be in charge of distributing your assets upon your death. The trustee is also empowered with managing specific aspects of your financial affairs, such as paying bills, should you become incapacitated in any way.
Major benefits of a trust.
One of the major differences between a will and a revocable trust becomes more apparent when the trust's owner passes away. Normally the will naming all beneficiaries must be filed with probate court and undergo a legal process that can take months to complete. The beneficiaries must wait for the will to be probated before receiving any property. Additionally, the will, once filed, becomes a public legal document, with the contents available to the general public.
With a revocable trust in place, the appointed trustee can immediately begin to distribute the assets to the beneficiaries, with no requirement to file for probate. The revocable trust, it should be noted, is also a private document, with the contents known only to the trustee and beneficiaries.
The revocable trust can be an important tool for estate planning, allowing for privacy, efficient and quick distribution of assets, and flexibility to make changes when needed without having to re-do the entire document.
Contact an estate attorney such as Jolein A. Harro, P.C. for more information about revocable trusts.