Posts Tagged ‘revocable trust’

The “Revocable Trust”

zacharias-legal-document-collection-by-idt-downtown-campusA Revocable Trust is an instrument that can help you avoid probate.  Probate is the process where a court oversees the distribution of your assets at your death (i.e., the property/money that belonged to you at the time of your death).  Probate can be a very expensive process depending on the size of your estate and the expense of an attorney.

You can revoke or amend your Revocable Trust at anytime, which means you can take back the property held in trust or you can change the terms of the Trust.  Please understand that because you have total control over the property in the Trust your creditors can get to the property during your life, though it may be more difficult for the creditors to reach the property because a legal action must be initiated by the creditor.

For a Revocable Trust to be effective in avoiding probate, you must transfer assets to the Trust during your lifetime, as the Trust must be the legal owner of the assets at your death, not you.  Many people create Revocable Trusts, but never transfer their assets to them; therefore, making the Trust ineffective for probate avoidance purposes.

Another benefit to a Revocable Trust is its ability to provide creditor and spouse protection for the beneficiaries.  If you have children and are worried about their spouse or their debts a Revocable Trust could be a very useful tool to protect the property held in Trust from the beneficairy’s spouse and creditors.

Another very important aspect of a Revocable Trust is Privacy!!  A Will becomes public record when you die.  Also, a Revocable Trust lets you plan for your disability whereas a Will is only effective at your death.

legal-research-by-gwilmore(Please see my blogpost “Why You Need a Will”. Usually when planning with a Revocable Trust, we also draft a Pour Over Will to make sure any assets that remained outside the Trust are transferred to the Trust at your death and the Will also controls the guardianship of your minor children).

Flickr credits: IDT Downtown Compus Library and  gwilmore

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