Estate planning involves a wide range of options that go well beyond the drafting of a will. A knowledgeable estate law attorney will often discuss a variety of different tools during the initial consultation — one option that many find appealing is a revocable trust. Also known as a living trust, a revocable trust offers several benefits, usually tied to the flexibility enjoyed by the person who establishes the trust (known as a grantor). Once the grantor is deceased, the trust then switches to an irrevocable trust that carries out the grantor’s established goals.
7 reasons why a revocable trust might work for you
The needs of each estate are different, but here are seven common reasons chosen by Forbes magazine for choosing a revocable or living trust:
- Avoids probate: The decedent’s assets pass on to beneficiaries without going through probate, which takes time, is expensive, can be stressful and involves a lot of paperwork.
- Avoids probate in other states: Larger estates will often spread their assets out, so probate may need to happen in more than one state, which makes the process that much more trying.
- Privacy: Many make a practice of not talking about money when they are alive, and a trust keeps the estate’s size, the range of assets and other details private.
- Can receive other assets: IRA’s, life insurance policies, pensions, and even other trusts can be consolidated into this trust after the grantor dies.
- Protection from creditors: The grantor is not protected, but beneficiaries enjoy protection from creditors.
- Flexible distribution: The thoughtful grantor will make special arrangements for important beneficiaries regarding amounts or tied to the age of a child or grandchild.
- Great for blended families: The arrangements of grantors who have been married more than once can be quite complicated, but these also address the issue of a spouse’s remarriage or other contingencies.
A thoughtful final gift
The loss of a parent or spouse can leave grieving family members to guess what a loved one wanted. Families can be torn apart by it. Grantors can avoid this by working with a knowledgeable and experienced estate planning attorney who can create a revocable trust as a final gift to others.