Advantages of a Revocable Trust
As we mentioned last week, talk of trust funds can lead to lots of confusion. Even those interested in learning more about estate planning can be overwhelmed when the topic of conversation turns to trusts. These tools are often viewed as confusingly complex and only for those with money to spare. This is characterization is, thankfully, untrue and to help demystify the world of trusts, I intend to spend some time exploring one popular variety in a bit more detail. Specifically, lets discuss revocable trusts.
What is a revocable trust?
As weve discussed previously, a revocable trust is a specific kind of trust fund that is created during someones life and can then be altered or revoked by that person at any time. The person who creates the revocable trust is known as the grantor and, unlike irremovable trusts, the grantor retains the power to control not only the trust, but also the property included within the trust. During the grantors lifetime, the money earned by the trust is distributed to the grantor and only after his or her death does the property transfer to other beneficiaries.
Advantages
One of the biggest advantages to creating a revocable trust is that it allows you to avoid the probate process. The revocable trust allows your loved ones to take control of your property without the need for court intervention. This can be especially useful when you own property in another state. In the event of your death, then your family members would need to conduct separate probate proceedings to take control of your property, a process that would waste valuable time and money. Similarly, a revocable trust allows your family members immediate access to your assets, including money, in the event that something happens to you. No need to go through probate, they will be able to gain immediate access to money in what will likely be a very difficult time.
Another plus of a revocable trust is that it can be used to avoid the need for guardianship or conservatorship. After creating a revocable trust, in the event something happens and you become incapacitated, the trust can be set up to pass into the control of someone else who will be able to direct what happens to the trust assets (meaning, your property) without needing to seek permission from a probate judge. This saves time and money, as incapacity can occasionally lead to long stretches of guardianship.
Revocable trusts are also useful in keeping private matters private. Rather than having your affairs labeled a public record by going through the probate process, trust documents are not filed with a court. No filing, no public record for others to see.
Take Stock of You Money
A final benefit of revocable trusts is that they are a great way to force people to take stock of their estate and start making decisions. All too often people fail to inventory the property theyve acquired over a lifetime and assume the distribution process will be simple. By thinking through these things now, which is required when establishing the revocable trust, you are forced to face the issue head on and begin giving serious thought to how you want your estate handled when youre no longer around. Revocable trusts are great ways to do this, rather than being written in stone, you have time to think and make amendments down the road, revising as your views shift as you age and circumstances change.
Minnesota Estate Planning Lawyers
An experienced Minnesota estate planning lawyer can help walk you through the probate process, answering questions along the way. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at(612) 424-0398.
Source: “Revocable Trusts,” published at AmericanBar.org.
