A Revocable Trust is a Trust that permits you to maintain full control (as Trustee) and have access to all your assets (as beneficiary). It’s like your family’s own private “rulebook.”
This type of trust is typically referred to as a Revocable Living Trust and is often used as a substitute to your Will. It permits you to keep total control and access to all your assets during your life, and provides for the distribution of your assets to your beneficiaries at your death. We often refer to a revocable living trust as your Book of Instructions. A well established advantage to Revocable Living Trusts is the avoidance of probate, which is required if you use a will to distribute your assets after death. Other advantages of Revocable Trusts, when property drafted, can include:
- Asset protection for your spouse after your death.
- Special needs planning for disabled beneficiaries.
- Asset management and protection for children who are not proficient with handling money.
- Protection of assets from a spouse’s subsequent marriage after your death.
- Disability planning in case you become disabled prior to death.
- Asset protection for your children if in bad marriages or to ensure your assets don’t go to the in-laws.
- Keeping your affairs private (as opposed to open for public review in probate).
- No court intervention required (handled entirely by Trustee you name in accordance with your detailed instructions).
- Plan for proper management of your business in your absence.
Very few revocable living trusts provide these benefits. Only a qualified estate planning attorney will know how to incorporate these protections into your plan. While a Revocable Living Trust has many advantages, it does not protect your assets from a nursing home, lawsuits, divorce bankruptcy or other creditors. Think of a revocable trust like a cookie jar. Anything you can get your hands on, they can get their hands on.