For a complete estate plan, a last will and testament is only the beginning. Estate plans should contain a will, life insurance policies, powers of attorney, long-term care plans, and trusts. Trusts are as valuable, if not more so, than a will. To find out more about revocable trusts and how it fits into an estate plan, read on.
Learn About Revocable Trusts
Revocable trusts are so-named because the trust owner can revoke or change any aspect of the trust any time they wish – as long as they are alive. Once the owner passes away, the trust cannot be changed in any way. Irrevocable trusts are more difficult, if not impossible, to change once created but may be appropriate for some.
Avoid Probate
Revocable trusts are an excellent way to avoid probate. Any estate asset you place in a trust is automatically excluded from probate. For example, if you decide to address your art collection in a trust, whatever you indicated about the art collection in the will is null and void. Depending on the estate laws in your state, any asset mentioned in a trust takes precedence over the same item mentioned in a will.
Vary the Trust
The estate assets contained within a trust can be as varied as that of a will. You can address real estate, vehicles, bank accounts, pets, and more within a revocable trust.
Gain Access to Inheritance Sooner
Revocable trusts, since they are not dependent on the actions of a probate court, allow beneficiaries the ability to gain access to their inheritances sooner. In most cases, probate court can take several months to probate the will. A trust, however, has no such restrictions and the only time constraint is the production of the death certificate. Usually, death certificates are ready two or so weeks after a death.
Appoint a Trustee
Just as a will has an administrator, a revocable trust does too. Rather than call the administrator a personal representative or executor, a trust is overseen by a trustee. The trustee's duties begin upon the death of the trust's owner and the main job is to see to it that the beneficiaries receive their property as ordered by the trust.
Appreciate Privacy
Revocable trusts are entirely private. Many people don't realize until it's too late that a last will and testament is a public document. Anyone with a desire to read a will can do so after it's filed with the probate court. A trust, however, is private. No one except the owner and the trustee has to know about everything contained within it. Not only does this aspect provide privacy to the deceased and the beneficiaries, but it also keeps the beneficiaries from readily knowing about what all the other beneficiaries received.
Those looking for a better way to distribute estate assets would do well to consider a revocable trust. Speak to an estate-planning lawyer for more information.