Revocable Trusts
A.k.a "Living Trusts"
A Revocable Trust is a legal document which allows you to:
1. Maintain control of your affairs while you are alive; and
2. Determine the distribution of your estate after your death.
You can amend, cancel, or revoke a Revocable Trust at any time.
In addition to providing flexibility as a planning tool, Revocable Trusts allow for the management of your affairs during incapacitation and facilitate the distribution of assets on death without the cost and delay of probate.
How Does a Revocable Trust Work?
When creating a Revocable Trust, you designate yourself as Trustee and appoint Successor Trustees to manage your affairs in the event of incapacity or death (initial Trustees maintain complete control over their assets). That control only shifts upon the occurrence of a specific event, such as a doctor's determination that you are no longer capable of managing your affairs due to illness or mental incapacity. After death, your assets are distributed to loved ones or held in trust for their benefit, as in the case of minor children and young adults. Only you can amend, cancel, or revoke your Trust, unless you've specifically granted that power to someone else within your trust document.
What Are the Benefits of a Revocable Trust?
While a properly funded Revocable Trust allows assets to pass to your heirs without the need for probate, Revocable Trusts are more than just a probate avoidance tool. They're all about peace of mind.
For parents of minor children, a Revocable Trust is a critical means of assuring that assets (such as life insurance) will be properly managed for the benefit of minor children if both parents become incapacitated or perish in a common accident. For elderly persons, a Revocable Trust provides comfort that assets in the trust will be managed properly by one or more trustees during a period of incapacity. And, everyone who is concerned about preserving their privacy and the privacy of family members should have a Revocable Trust to avoid the publicity of the probate process.
A properly drafted Revocable Trust allows you to:
Eliminate probate on your death
Eliminate guardianship if you become mentally incapacitated
Name the person you want to control your affairs if you become mentally incapacitated
Keep your affairs private
Provide for children and other loved ones through a flexible planning document that can easily be changed as your family’s circumstances change.