Estate Planning: Revocable Trusts

Here is part two in a six part series that aims to provide general information about various documents that can be helpful in Estate Planning.

Today, we’re going to focus on Revocable Trusts. Before we go any further, it’s important to understand what the term “beneficiary” means. A beneficiary is an individual or organization whom you select to receive some form of a benefit like an inheritance through a will or trust. A beneficiary can be a person or a charitable institution, for example.

What is a Revocable Trust?

A Revocable Trust is a legal entity that holds your property and describes how it may be used both before and after your death. You can revoke this type of trust at any time before you pass so long as you have not become mentally incapacitated. However, the power to revoke can make the trust assets vulnerable to creditors during your lifetime.

Here is part two in a six part series that aims to provide general information about various documents that can be helpful in Estate Planning.

Today, we’re going to focus on Revocable Trusts. Before we go any further, it’s important to understand what the term “beneficiary” means. A beneficiary is an individual or organization whom you select to receive some form of a benefit like an inheritance through a will or trust. A beneficiary can be a person or a charitable institution, for example.

What is a Revocable Trust?

A Revocable Trust is a legal entity that holds your property and describes how it may be used both before and after your death. You can revoke this type of trust at any time before you pass so long as you have not become mentally incapacitated. However, the power to revoke can make the trust assets vulnerable to creditors during your lifetime.

Who should consider a Revocable Trust?

Anyone who wants to avoid the public scrutiny of probate court filings. Because trusts can often be administered outside of court proceedings, the world does not get to see who inherits which asset or how much that asset is worth. These types of privacy considerations are important to many people. (Other people don’t mind if the world learns who got the velvet Elvis wall art.)

Anyone who wants to exercise some measure of control over the use of their property following their death. For instance, a Trustee can deny payment of a monthly stipend to an adult child unless that child attends worship services every week. The possibilities for “control beyond the grave” are virtually endless.

Anyone who wants to avoid the expense and hassle of guardianship proceedings. If a person becomes mentally incapacitated, the state courts can place that person and their property into a guardianship. Guardianships cost money and can be somewhat undignified. By placing one’s assets in a revocable trust in advance of any mental incapacity, a person may avoid guardianship because the Trustee would administer those assets instead of a court-appointed guardian.

There might be other reasons a Revocable Trust makes sense for you or somebody else you know. Feel free to reach out to me if you would like to discuss your particular situation.

Anyone who wants to avoid the public scrutiny of probate court filings. Because trusts can often be administered outside of court proceedings, the world does not get to see who inherits which asset or how much that asset is worth. These types of privacy considerations are important to many people. (Other people don’t mind if the world learns who got the velvet Elvis wall art.)

Anyone who wants to exercise some measure of control over the use of their property following their death. For instance, a Trustee can deny payment of a monthly stipend to an adult child unless that child attends worship services every week. The possibilities for “control beyond the grave” are virtually endless.

Anyone who wants to avoid the expense and hassle of guardianship proceedings. If a person becomes mentally incapacitated, the state courts can place that person and their property into a guardianship. Guardianships cost money and can be somewhat undignified. By placing one’s assets in a revocable trust in advance of any mental incapacity, a person may avoid guardianship because the Trustee would administer those assets instead of a court-appointed guardian.

There might be other reasons a Revocable Trust makes sense for you or somebody else you know. Feel free to reach out to me if you would like to discuss your particular situation.