Key Attributes, Benefits, and Drawbacks
A revocable trust is an estate planning tool designed to manage and protect a grantor’s assets during his or her lifetime. The flexibility and privacy the revocable trust provides makes it an appropriate vehicle for many people. Unlike an irrevocable trust, a revocable trust can be amended, or revoked entirely, at any time during the grantor’s life because the assets remain a part of the grantor’s estate. If the grantor becomes incapacitated, a previously designated trustee may step in on the grantor’s behalf. Upon the grantor’s death, the assets are distributed directly to beneficiaries—the hassles and costs of probate court are avoided completely.
Revocable trusts provide grantors key benefits at different life stages:
How Might a Revocable Trust’s Characteristics Benefit You?
Consider the following:
- Do you want to be able to add and remove trust beneficiaries over time, for example, automatically include the addition of yet-to-be-born grandchildren? Revocable trusts make this easy. You’ll simply need to draft amendments to the original trust documents each time you want to make a change.
- Is retaining control critical to you? With revocable trusts, you can define what “incapacity” means and designate an appointee— a trusted, personal contact rather than the public court system—to decide whether or not you’ve reached that state.
- Do you own property in multiple states? Consolidating those properties under the umbrella of a revocable trust will prevent probate in other states.
If you are interested in exploring how your estate plan could benefit from a revocable trust, please reach out to us.
This article was published as part of the LBA Fall Reflections & Observations.