What is a Revocable Trust?
A revocable trust allows the grantor, or creator of the trust, to change the terms of the trust before their death. The trust is transferred to the beneficiaries when the grantor dies. Income earned by the trust can be distributed to the grantor while he or she is alive as well.
Revocable trusts give you immense control to make changes as you choose. This includes things such as adding or removing beneficiaries, changing assets, changing instructions, or ending the trust entirely. They are a counterpart to irrevocable trusts, where the trust cannot be changed for any reason.
How Do Revocable Trusts Work as Part of Estate Planning?
Revocable trusts are the most flexible trust option available. The ability to make so many changes is highly valued in estate planning, especially when many parties are involved or when the grantor is still relatively young and healthy but wants some extra protection.
Trusts help beneficiaries avoid probate, but do not prevent you from needing a will. After your death, revocable trusts can create subtrusts which can serve as a container to hold property if a beneficiary is still a minor and cannot legally hold property without a court-appointed guardian. It also allows you to set distribution limits if you feel the beneficiary may not use the money wisely.
There are some disadvantages: revocable trusts come with higher costs than other simpler estate planning tools, they may take more time and effort to administer, and they offer no tax advantages during your life. You also will still need a will in addition to your revocable trust. Lastly, the trust is still in your name within your lifetime, which puts it at risk from creditors.
Deciding if a Revocable Trust is Right for You
The best way to decide if a revocable trust is right for you is to speak with a lawyer and outline your concerns about how you would like your estate handled. At Millman Law Group, we are experts in ensuring your assets are protected.
If you are looking for a flexible solution and are considering a revocable trust, contact us today. We offer free consultations to learn about your specific needs and can offer the insight you need to make an informed decision.