A Trusted Estate Tool: What To Know About Revocable Trusts
The word "trust' can be intimidating to some, but a revocable trust is really no more difficult to understand than a will. If you haven't heard of this "will alternative", you may be surprised at how it surpasses a will in many ways. While it may not be entirely possible to substitute a revocable trust for a will, you should consider this type of trust as a valuable part of your total estate plan. Read on to learn more about the benefits and basic facts of revocable trusts.
This legal document is an additional estate planning tool that allows a person to have complete control of the contents of the trust while living. The contents of the trust are simply the assets of an estate, similar to items that are provided for in a will, such as real estate, vehicles, art, jewelry, bonds, stocks, cash and more.
You could put any asset in a trust that you would normally put in a will, and just like a will, you can name beneficiaries of those assets in the trust.
Like the executor, or personal representative, a trustee is appointed by the trust's owner to oversee it when the owner dies. Additionally, you can specify that the trustee pays any financial obligations of the estate, such as taxes or other debts when you pass away, or if you become incapacitated. Until death, the owner of trust may add and remove assets and change beneficiaries at will.
When a Trust is Better Than a Will
Normally, all wills must be filed in your county's probate court. While the will is being probated all beneficiaries must wait for the process to be complete before being awarded the assets, a process that can take several months, even with uncomplicated estates. Once filed with probate court, the will becomes a public document, available to view by anyone with a desire to do so.
With a revocable trust, the trustee can distribute the assets according to the trust as soon as the death certificate becomes available, usually within a week or so after the death. Any property assigned to a beneficiary in the trust is not subject to probate. Even if the will makes provisions for the very same asset, the trust takes precedence over the will. Moreover, the revocable trust is an entirely private document, with only the owner and the trustee (and perhaps the attorney who helped form the trust) knowing the full contents of it.
Contact an estate attorney for help in setting up your revocable trust and reap the benefits of this valuable estate planning tool. Read more here.