– Aren’t trusts just for rich people? Not at all! Anyone who owns property and desires to leave it to his/her children (or other beneficiaries) would benefit from a Revocable Trust. You do not need to be a millionaire!
– What exactly is a Revocable Trust? A Revocable Trust is a specific type of trust which allows you (the Grantor) to change its terms at any time, or completely nullify (revoke) the trust for any reason. During your lifetime, you may utilize the money and property in the trust in any way you choose. You may sell it, spend it, or give it away. At the time of your death, all of your assets will pass automatically to whomever you designate (your beneficiaries), as you specified in the trust document.
– Why should I create a Revocable Trust- isn’t a will good enough? There are several advantages to a Revocable Trust. A major one is avoiding a legal process called Probate. Normally when someone dies, their property cannot be distributed to the beneficiaries right away. A number of documents must be filed with the court. After this, there is a waiting period of several months before the personal representative can transfer property, or other assets, to the beneficiaries. The beneficiaries usually will need to hire an attorney to assist them with the Probate process; this will likely cost several thousand dollars. With a Revocable Trust, your assets can be liquidated immediately to pay funeral expenses, medical bills, and other debts, and property can be transferred to your beneficiaries without delay. In addition, an attorney may not even need to be involved. Another significant benefit of a Revocable Trust is that the trustee can manage your assets should you become temporarily or permanently incapacitated.
– Does a Revocable Trust provide a guardian for my children? No, it does not. However, along with a Revocable Trust, you will also have a specialized type of will, called a Pour-Over Will: it is so-called because it will automatically “pour” any assets which are not already part of the Trust into it when you pass away. In this Pour-over Will, you may name guardians for any underage children.
– If I put my assets in a Revocable Trust may I change my mind regarding who will receive my property and money? Absolutely! With a Revocable Trust, you may put assets into the trust and take them out at will. You may also modify who will receive your real property, money, or other assets, after your death. A Revocable Trust enables your estate plan to change with your circumstances.
Eifert Law Firm
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- Some questions and answers about Revocable Trusts - March 29, 2022
