Are Revocable Trusts A Good Idea?
Updated: Sep 14, 2022
According to Wikipedia, a trust is a legal entity that allows you to distribute all of your assets legally to your beneficiaries. Generally, it is an easy process, but it can be complicated depending on your assets and family situation.
What Is A Revocable Trust?
In a Revocable Trust the provisions or stipulations of the trust can be changed or canceled by the grantor or the person that set up the trust. An example would be a trust fund set up for a child that is only good as long as the child stays in school or stays out of trouble.
The grantor can cancel the trust if those terms are violated and if they feel that they need to be terminated. The person who sets up the trust has the ultimate control and can terminate or alter the trust at any point during his or her life, as they see fit.
What Are The Pros and Cons Of A Revocable Living Trust?
Pros:
Avoids Probate
Probate is a legal process to determine the validity and authenticity of the decedent's will. It is a lengthy and time-consuming process unlike a revocable trust. With this, the trust transfers to the trustee upon the grantor's death without court oversight.
Flexibility
A revocable trust is flexible. It can be altered as required to fit the current situation of the trustee and the grantor as family dynamics change.
Privacy
Another benefit of a revocable trust is privacy. As the assets in trust do not go through the public probate process after the death of the Grantor, it provides privacy to the family.
Availability of Assets on Death
In a revocable trust, assets do not get frozen upon the Grantor's death. They get transferred to the trustee immediately.
Cons:
Registration of Property
Registration of the property is required to fund the trust. This means you'll have to divulge everything you want to include in the trust openly.
May not Automatically Adapt to Changed Circumstances
Trusts do not change automatically on their own. If the circumstance changes, you have to amend the trust. This means you'll have to pay close attention to the current situation and ensure that the trust is in line with changes in your family dynamics.
What Assets Should You Put in a Revocable Trust?
There are plenty of assets that you can put into a Revocable Trust.
1. Cash Accounts
2. Non-Retirement Brokerage and Investment Accounts
3. Stocks And Bonds
4. Partnership Assets
5. Business Interests
It helps you consolidate your assets in one central location. It can also help you ensure that your money and assets will be transferred to the appropriate beneficiary.
Do You Need a Lawyer For Help With A Living Trust?
You'll need the proper knowledge/guidance about your state-specific laws to have a revocable trust. Hiring a lawyer or attorney to create a trust can cost you heftily. You can contact other trust document services that can help you create a trust at a fraction of the cost. A Legal Document Assistant, like Monday Morning Trust, can help you in legal matters affordably without you needing to spend thousands of dollars. As an experienced LDA who specializes in Trusts only, we can help guide you in filling out the proper documents, thus making a trust that works for you and your particular needs.