There are several benefits to having a revocable trust. With a revocable trust, often called a Living Trust or a Loving Trust, you can place property and assets into the trust, and if you decide later, you can remove the property and terminate the trust. This is different than an irrevocable trust, which cannot be changed. It’s great to have a revocable trust if you think you might change your mind about the assets in the trust before your death. It’s called “revocable” because, as long as you’re mentally competent and sound, you can change or dissolve the trust for any reason at any time.
Typically, a revocable trust becomes irrevocable (cannot be changed) when you die. For example, you can terminate or end a revocable burial trust whenever you would like to before death or before you become incompetent if it were to happen. But if the burial trust is still active upon your death, or if you become incompetent, the trust becomes irrevocable or unchangeable, and the money in the trust must be used for your burial costs.
A trust involves three different parties: you as the creator of the trust, the beneficiaries, and the trustee or trustees that agree to manage the assets according to the terms of the trust. You will probably want to name yourself, and if married your spouse, as trustee. Being a trustee gives you full control of the trust and assets while you’re alive meaning you can sell, exchange, invest or give away your assets as you please.
Things to consider with a revocable trust:
Property in More Than One State: If you own property in multiple states, you face the likelihood of going to probate in each state. Note, this is true for time share ownership too. Make sure your property is clearly outlined in your trust, revocable or irrevocable.
Privacy: In most cases a revocable trust is private and does not have to be presented to the court in order to be effective. There are benefits to this, depending on the size of the trust and the family members.
Management: Unlike a will that operates after death, a trust operates during life. Working with an experienced attorney for both a will and trust can make the process for you and your loved ones less painful.
Taxes: A revocable trust is not intended to save on Estate Taxes, unlike an irrevocable trust, which can help.
AVOID PROBATE WITH A REVOCABLE TRUST
Revocable trusts provide a way to avoid probate because you can put all your property and assets into revocable trusts, and you can have full control over it. By transferring all your assets to a trust, your probate estate is essentially empty, which allows your estate to avoid the probate process. By avoiding probate, you avert probate fees and expenses, avoid the lack of privacy, and bypass other disadvantages of the probate process.
You just need to make sure that everything you own and purchase, like a new home, or open a new brokerage account, is held in the trust to avoid probate. If any part of your estate is not in your trust, then those assets are in your probate estate and are subject to the probate process. The reasons for using a revocable trust may appeal to you, and if so, your next step is to consult a lawyer. The attorneys at Rice Law Group have experience with irrevocable and revocable trusts.
