When you create a revocable trust, you’re removing some of the more complicated aspects of estate planning. Learn more about how it works and what’s the process.
What Is a Revocable Trust?
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A revocable trust is a trust in which a grantor places their assets while they are still alive so that the assets can be released to the beneficiaries upon their death. It is also called a revocable living trust.
Revocable living trusts can be advantageous because they are an effective way of estate planning. They preserve all your assets while providing a safety net for your family when you are not there.
Do I Need a Revocable Trust and How Does It Work?
In order to appreciate the benefits of a revocable trust, you need to understand how it works.
Revocable trusts allow you to alter the trust as you wish. This is particularly helpful if you set up a trust while you are still young as circumstances can change, and you may want to change the beneficiaries in your trust.
Assets in a revocable trust avoid probate court. Probate is a legal process of distributing your assets. With a revocable trust, the grantor can pass their assets without a court order– a slow process that can take months.
Assets in a revocable trust can receive up to $1,250,000 in insurance, according to the Federal Deposit Insurance Corporation.
A revocable trust is private. Only the parties involved are aware of the revocable trust document, which is not kept as part of public record.
It assists in the event of incapacitation of the trustee. Your chosen successor trustee usually steps in and manages your assets. This avoids a court-appointed conservatorship for your estate.
How Much Should a Revocable Trust Cost?
The cost of a revocable living trust can vary depending on the assets (also called the trust’s principal) that go into the trust. An asset’s appreciation or depreciation may cause this variation in cost.
This is where drafting a living trust becomes more complex than a regular will and requires a competent trust lawyer, especially if the assets are valuable.
However, in the long run, the expenses for setting up a revocable trust are less than those your loved ones could incur if the decision for your assets goes into probate.
Get in Touch With an Estate Planning Attorney
A revocable living trust is a financial move that you will want to consider if you want the continuity of your estate in the right hands.
So, are you ready to open a revocable trust? Get in touch with the Law Office of Paul Black, an experienced estate planning attorney at 404-383-6585 or email the office at [email protected].
He will answer all your questions regarding revocable trusts and potentially minimize your estate tax and other estate planning costs.
What Should You Not Put in a Revocable Trust?
According to federal law, the assets that can’t go into a trust include; retirement accounts, medical savings accounts, active financial accounts that you pay bills with, and motor vehicles.
Is a Revocable Living Trust Worth it?
Yes. You may enjoy peace of mind knowing that the prosperity of your family will continue even upon your death. They won’t have to wait for probate to decide on your estate.
If you have a family member with special needs, it can be beneficial to them, setting them up for life in your absence. And if you decide to create the trust for a charitable cause, you can rest easy knowing that you cared for the less fortunate.
Who Is in Control of a Revocable Trust?
The trustee is usually in control of a revocable trust. They keep track of the income and estate taxes. However, if a trustee is incapacitated or is deceased, the person they have named successor trustee assumes the role of controlling a living trust.
Do Revocable Trusts Protect you From Lawsuits?
Putting your assets in living trusts does not guarantee that you will be immune to lawsuits. As long as the trustee owns property and assets in the trust, they can suffer a lawsuit against themselves.
This is why you need the services of an experienced trust attorney or law firm to interpret estate law and provide you with all the legal resources you need to navigate the hurdles of revocable trusts.