4 Advantages of Revocable Trusts

Revocable trusts are a type of estate planning tool that many individuals use in order to specify what will happen to their property when they die. With a revocable trust, you can change the terms of the trust arrangement at some point in the future. Many like to use a revocable trust for estate planning instead of a simple will because of the extra control that can be obtained. This type of trust arrangement provides individuals with several advantages when engaging in estate planning. Here are some of the benefits that come with this type of trust.

1. Can Be Altered

One of the biggest advantages of a revocable trust is that you can alter it after you set it up. With irrevocable trusts, once you get them started, you have to abide by the terms. The only person that could change an irrevocable trust is the beneficiary. When a beneficiary knows that they will get a certain amount of assets, they are not very likely to change the trust. With this type of trust, if your circumstances change or if you change your mind, you can alter the conditions of the trust. You could change the beneficiaries, change the amount of assets that are passed on, and change many other things.

2. Control

Another advantage of using a revocable trust is that you will have control over what happens to your property when you die. If you do not utilize a trust, your assets will be distributed according to the probate system. There is no telling what could happen to the assets that you have worked so hard to accumulate. With a revocable trust, you can designate exactly who gets every piece of your property. You can also determine when your beneficiaries will take possession of your assets. For example, if you had young beneficiaries that you did not want to bestow a large inheritance on, you could make it so that they will only receive the inheritance once they turn 25. This will keep them from spending the inheritance and it will give you control over how everything is distributed when you are no longer around to be in charge of the process.

3. Avoid Probate

With a revocable trust, you can also help your family members avoid the probate process entirely. If you use a simple will, your assets will still have to go through the probate process before they can be distributed. The process of probate can be very costly and time-consuming for your family members. If anyone contests the will, it could be a long, drawn-out process for everyone involved. 

4. Privacy

With this type of trust, you can also put a premium on privacy between you and your family members. When everything goes through probate, the entire process will be put in the local newspaper. Everyone will know what you had and they will know where it ended up. With a revocable trust, none of this will occur and everything will stay between you and your beneficiaries. For individuals that have large assets, this can be a very attractive feature so that all of your beneficiaries stay safe and remain anonymous.

blog comments powered by Disqus