A revocable trust or living trust can be a wonderful way to create an estate plan for you and your family. These trusts are flexible legal documents that can be modified during your lifetime. When they become irrevocable, they will protect your assets for your family.
Motley Fool’s recent article, “Revocable Trusts: What You Need to Know,” explains that a revocable trust is a trust you create to hold whatever property you want to be subject to its provisions. What makes a trust “revocable”, is that even after you create it, you can change it or cancel it and distribute its assets back to yourself. When you create a revocable trust, you act as its trustee during your lifetime.
A revocable trust is worthwhile, if you become ill or an injury incapacitates you to such a degree you can’t handle your financial matters. Successor trustee provisions of your revocable trust let the individual you name take care of those matters on your behalf. The successor trustee becomes responsible for paying your regular bills and handling ordinary financial needs that arise. When you're able to manage your own affairs again, you can take back the trustee role.
The revocable trust includes your wishes for what should happen to trust assets after your death. For example, a revocable trust can be useful for those with minor children. You can provide for the trust to continue and for trust distributions for the benefit of those children to be made by the successor trustee, until they’re old enough to handle their own financial affairs.
Another benefit of revocable trusts is that your family can usually avoid probate. Revocable trusts are private documents that typically aren't subject to probate proceedings. A successor trustee can manage your affairs without court intervention or public scrutiny.
Remember: in order to implement the revocable trust, you'll need to formally transfer the title of your property from your name to the name of the trust. If you forget, the trust’s provisions won't apply, and your heirs might have to go to court after your death to address those assets.
Speak with an experienced trust attorney to learn how a revocable trust may fit with your estate planning.
Reference: Motley Fool (June 23, 2017) “Revocable Trusts: What You Need to Know”