Revocable Trusts: What To Know About This Trusty Estate Planning Tool
The last will and testament document has always held a prime spot in any estate planning package, and is usually the only tool most people even consider when making financial plans for after their death. The will, however, has its limitations, and if you are not considering the use of revocable trust as a vital part of your estate plan, you may be missing out. Read on to learn the basic facts and benefits of using this valuable estate planning aid.
What should go into a trust?
Anything you would address in a will can also be addressed using a revocable trust. Bank account funds, homes, cars, boats, jewelry, art and more can reside in a trust instrument. Just like a will, part of the trust will designate specific beneficiaries to inherit specific pieces of property contained in the trust. Unlike a will, however, the property addressed in a trust is never subject to probate, so the beneficiaries can receive their inheritances in a far more timely fashion than would be possible with a will that must be probated. It's interesting to note that if the same asset is addressed in both a will and a trust, but the asset has differing beneficiaries, the beneficiary named in the trust gets precedence over the one named in the will.
Who oversees the trust?
Again, just as in a will, a trusted person is put in charge of distributing and overseeing the trust once the trust's owner passes away. The duties of this person, referred to as a trustee, serves to fill a similar role as that of a personal representative (or executor). As long as the trust's owner is alive, the trust can be modified as often as needed (which explains the "revocable" part of the term). Furthermore, the trustee is given other financial duties to accomplish, such as paying the bills of the estate.
The privacy issue.
Another benefit of a revocable trust is that it is entirely private. Once a traditional will is filed with the probate court, it becomes a public document for all to see, including the beneficiaries. With a trust, no one but the owner and the trustee necessarily know the full contents of it. This means that individual beneficiaries have no way of knowing what the other beneficiaries are inheriting unless they choose to divulge that information. This feature could help reduce the potential for animosity and jealousy that often occurs with a will.
Be sure to speak to an estate planning attorney for more information about revocable trusts. Contact a firm like Lynn Jackson Shultz & Lebrun PC to learn more.