What do you know about a revocable trust? As an estate owner a little insight into what a trust is would help you in understanding its importance. Below, we have highlighted a few important things you should know about this estate planning document including 6 interest facts about it.
What is a Trust?
A trust is like a legal vehicle created by a grantor who places the assets in the trust in the care of a trustee. It is the job of the trustee to ensure that the law of the trust is adhered to. It is also the job of this individual to ensure that the assets in the trust is well managed according to the wish of the grantor.
What is a Revocable Trust?
A revocable trust is a trust that can be modified or altered after its creation without the consent of the beneficiaries. In other words, the grantor of a revocable trust can alter its terms anytime any day without notifying the beneficiaries. They can decide to expunge the name of a beneficiary from the trust and assign new one, or alter the way assets in the trust is to be distributed among each beneficiaries.
6 surprising facts about Revocable trusts
- Revocable trusts can be altered
The major purpose of a revocable trust is to help you manage and safeguard your assets if you become incapacitated, whether the incapacitation is as a result of an illness, aging, or an injury. You can always alter the terms of a revocable trust and even go as far as revoke them.
- Revocable trust cannot help you prevent estate tax
Since you hold the power to revoke or alter them, and therefore maintain power over the assets in them, those assets remain added in your estate for tax reasons. As far as the government is concerned, any assets held in a revocable trust are not different from assets held in your name. So, you’ll have to pay taxes on them.
- They can help prevent the stressful probate process
Probate is a lengthy and expensive process done to determine the validity of your will. Assets present in a revocable trust bypass the probate process and are transferred straight to your heirs. For most individuals who have this document, this is probably the important benefit to creating a revocable trust.
- You can name yourself as the trustee of a revocable trust
One of the important benefits of a revocable trust is the control it provides its owners over their assets. In more complex kinds of trusts, the trustee (the individual responsible for overseeing the assets in a trust) is usually a banker or an attorney, but most people choose to be their own trustee.
- Revocable trust can keep your assets private
A will that undergoes the probate process becomes part of public records. Anyone with access to the record can see what assets you held and who they are intended for. A revocable trust, on the other hand, is a private document, even after your death. Have it in mind that if you are concerned about its privacy, you may not want to choose yourself as your trustee.
- A revocable trust doesn’t provide asset protection
Assets placed in a revocable trust can be touched by creditors. Even though they are not held in your name. For legal reasons, assets in the trust are consider like they are yours. If a creditor files a lawsuit against you, the assets in your revocable trust are at risk.
Need an estate planning attorney?
Planning an estate can be a complicated process. It involves a lot of paperwork and legal documents like power of attorney, trust, will, etc. Thus, if you want to plan your estate the right way, it is important that you contact a professional.
An estate planning attorney can help you in several ways. This professional can help you plan your estate and help you create the necessary estate planning documents. If you need to update your estate plan, this professional can be of help as well. Also, if you have concerns or questions, contacting an estate planning attorney is the best way to find answers.
We boast of competent estate planning attorneys who can help you navigate the tough estate planning process. Simple get in touch with our office so we can offer you or your loved ones our professional services.