Why should I use a Revocable Trust?

Why should I use a Revocable Trust

It is not uncommon that a client will ask me about creating their estate plan using a traditional will.  My first question is whether my client understands what a revocable trust is, and the advantages that it has over a will.  After my explanation, all of my clients have deciding to implement a revocable trust as the key document in their estate plan.  This article will summarize the reasons for favoring a revocable trust agreement over a traditional will.

What is a Revocable Trust?

A revocable trust, sometimes called a living trust, is a trust created during one’s lifetime that can be revocable or changed at any time.  As a result, the trust can be “undone” if you change your mind.  Unlike a will, the trust is not effective at death, but is effective as soon as it is executed by the one establishing the trust, commonly called the “trustor” or the “grantor.”

What are the advantages of a Revocable Trust?

First, and this is a big one, because the revocable trust is not effective at death, probate, which is the court-supervised process of transferring assets from the decedent to the beneficiaries, is not required.  This generally means that the process of distributing assets belonging to the decedent to his or her beneficiaries does not need court supervision, which usually leads to a timelier transactions and less attorney and other professional fees.

Secondly, a will is a public record which means that when it is deposited with the probate court, anyone can read it.  Not so with a revocable trust.  In most cases, only the beneficiaries of the trust are entitled to the trust agreement.

Next, a revocable trust can make things easier for you in the event that you become mentally incapacitated.  Under a revocable trust, should you become no longer able to handle your affairs, under the trust agreement your successor trustee can generally step in and assume trusteeship.  With a will, this potential is not covered and one’s family and friends would need to ask the probate court to appoint a guardian or conservator to manage one’s affairs.

Lastly, assets, such as real estate, held in another state are subject to that state’s probate procedures unless the asset is held in the revocable trust.  I have had many of my clients register investment properties that are located in the Georgia and South Carolina into their revocable trust, and therefore remove the risk of their family having to go through an “out-of-state” probate.

While using a revocable trust as part of one’s estate plan is an easy decision, it is important is a review of one’s estate takes place with the estate planning attorney so that the trust is properly funded.  This sometimes is a step that is missed, and therefore a well drafted revocable trust could be a waste or time (and money).  At Carter Reymann Law we will ensure that the drafted revocable trust meets the needs of our client, and is also properly funded. Please contact us at 727-456-8970 to discuss your estate planning needs and any family concerns.

Gregory Reymann

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