The Revocable Trust is a powerful estate planning vehicle. You are able to secure various forms of assets into the trust and at any point prior to your death. You can remove the property and assets from the trust. You can also terminate the trust at any which point you choose. This is far different then an irrevocable trust. An irrevocable trust, which the name suggests, cannot be changed. As with any trust, you have full control of how exactly your assets should be managed and whom they should be disbursed to.
With all trusts, the same players are involved: The grantor, the trustee, & the beneficiary. The grantor is you, the creator of the trust. The beneficiary is the individual or organization inheriting the property from the trust. The trustee manages the assets within the trust. The trustee does not arbitrarily decide how the assets should be managed. Terms are given by you, the grantor, which provides guidelines as to what the trustee can and cannot do. When dealing with a revocable trust, you would want to name yourself as the trustee. HINT: if you don’t want the property to be disbursed to the heirs within the trust after your death, consider establishing a line of trustees who should take over your role after your death.
Dodging The Probate Bullet
A Trust is also a great way to avoid probate. Remember, whatever is not held in a trust will need to go through the process of probate. Whatever property, savings accounts, and brokerage accounts you may have, consider putting them into the trust. With the probate process, your beneficiaries are exposed to dealing with a will contest. What that means is regardless of how well written your will is and how many witnesses you may have to attest to the validity of the will, various parties will still surface after your passing to try and contest the terms you have set forth in the will that allow your beneficiaries to receive the property not already in your trust. On top of that, when going through the probate process, you have various fees and expenses (filing fees, attorney fees, etc.) that need to be handled.
Here are some key fact you want to keep in mind when it comes to a revocable trust:
The revocable trust generally does not provide any significant tax benefits
A revocable trust remains effective even if it is not presented to Surrogate’s court.
Make sure you contact an experienced Trust Lawyer in New York City to help you with drafting the trust. They understand the language of trust planning and will be able to create an iron clad trust.
Bear in mind if you have property in various states, there is a possibility your executor must go through the process of probate to be able to transfer the property over to your beneficiaries. A trust avoids that.
A revocable trust is a financial tool that can secure your control of your property while alive and in death. It is a great starting point when approaching your estate planning. Always consider retaining a Trusts Lawyer to walk you through drafting the irrevocable trust.