Revocable Trusts: A Key Part Of Your Estate Plan
Posted on: 19 October 2016
Probate has been getting a lot of negative press lately; it seems that we see or read about "avoiding probate" every day or so. While it's unlikely that you can completely avoid the probate process, there are several alternative methods of dealing with an estate that have certain major advantages. A revocable trust, also known as a living trust, is one of those methods. To help educate you on the benefits of adding this type of estate planning tool to your plans, read on to learn more.
What is a revocable trust and how does it resemble a will?
A revocable trust shares many similarities with a will, but its advantages gives both the owner of the trust and the estate beneficiaries more control and access. While the owner is still living, the trust may be set up and assets may be transferred into the trust. Almost any asset you have, including real estate, vehicles, cash, bonds, art and more can be transferred into a trust. Once the trust is set up, the owner has complete control over it (which is the "revocable" part); they can add assets, remove assets and do away with the entire instrument if desired.
Additionally, the revocable trust shares two similarities with the will:
1. A trustee is appointed, who fulfills nearly the same roll as the personal representative (or executor) of the will. This appointee will oversee the trust once the owner passes away and it's their responsibility to ensure that the trust is distributed according to the desires of the owner. The trustee is also directed to handle other financial affairs after the owner's death, such as paying bills and selling assets.
2. The trust names beneficiaries who are to inherit specific estate assets.
How is the trust different than a will?
The major benefits of a revocable trust over a will becomes even more apparent once the owner passes away:
1. Normally, the will is filled with probate court and all named beneficiaries must wait for probate to be complete; a process that sometimes takes several months. With a revocable trust, however, the named beneficiaries can take possession of the bequeaths almost immediately, since any property being held by the trust is exempt from inclusion in the probated will (even if the will names the exact same property).
2. Once a will is filed in probate court, the contents of that will becomes public record, view-able by anyone with an interest to do so. Trusts are entirely private, with even the other beneficiaries not knowing what the other beneficiaries are receiving.
To learn more about the part a revocable trust could play in your estate plan, contact an attorney, such as those found at McFarland & Masters LLC.
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