Estate planning has many different avenues to protect assets before and after you die. Many people use a will to outline how an estate is distributed to beneficiaries. Another option is a revocable living trust. Trusts aren’t only for the wealthy. People set up trusts for many different reasons. Here’s what to know about trusts to know whether one is right for you.
Why Would You Want a Revocable Living Trust?
A revocable living trust consists of the assets you place in the trust. You can be the trustee and hold control over the trust while you’re able, or you can appoint another trustee to manage the trust. A revocable trust gives you the right to change or revoke the trust at any time. You should name a co-trustee in case of disability or death. One of the benefits of a revocable living trust is that a trustee can act on your behalf if you become disabled. On your death, the trust is like a will. The property can managed by the beneficiaries without having to go through probate. Trust documents are private, which means that your private financial affairs don’t get filed with the court to become public record.
What Are Some of the Considerations When Forming a Revocable Living Trust?
A revocable living trust can fit your needs if you want to control how your estate is doled out to your heirs. If you have a child who hasn’t been good with money, a trust protects the estate under your guidelines. But a living trust isn’t for everyone. Setting up a revocable living trust can be expensive. You have to register property in the name of the trust. This can get expensive. The legal fees are higher than with a will.
You must keep up with changes to your own circumstances when you have a trust. You will need to make amendments to the trust if you have more children or get married or divorced. It can be cumbersome to remember to register any new assets into the trust. A revocable living trust doesn’t protect your assets against creditors. However, a revocable living trust does have many benefits upon your death, because your beneficiaries have immediate access to the trust, depending on how you set it up.