There are many benefits to revocable trusts in estate planning, making it one of the most popular options. If you’re looking to create a new estate plan and aren’t sure whether a revocable trust is a good fit, here are a few key benefits to consider. You can weigh these against the features of other options you are evaluating.
1 – Can Be Changed
One of the biggest benefits of revocable trusts is the ability to change it. At any time, you can alter the terms through an addendum or replace it with a newer version. Thus, it easily adapts to changes in your life. For instance, you may have certain preferences while your children are young versus when they become young adults. You can change trustees, beneficiaries, or any other specific terms as needed. It’s truly a flexible document.
2 – Avoids Probate
Avoiding a lengthy and costly probate process is a primary goal for most estate plans. Revocable trusts do precisely this. Assets are transferred into the trust in advance rather than going through probate. Additionally, a pour-over will can transfer any remaining assets upon your death. Although those residual assets may require probate, the process is usually less complicated.
3 – Simplifies Transfer of Assets
Transferring of assets to heirs is easier in estates with revocable trusts. Since assets already belong to the trust, they can be quickly liquidated or transferred. As for monetary distributions, that can be done as soon as debts are settled and the remaining value is determined. There are no court proceedings or other such delays.
4 – Takes Effect Immediately
Trusts become active as soon as the legal documents are prepared and signed, so they can be helpful in cases of disability or incapacitation. While you are living and fully capable, you are the trustee and control the assets in the trust. In cases where you cannot perform this duty, the individual(s) that you name as backup(s) have the ability to act on your behalf. This, along with a power of attorney, can ensure that your finances are properly managed under those circumstances.
More Benefits of Revocable Trusts
These are just 4 of the key benefits of revocable trusts in estate planning. Based on your personal circumstances, there are many other protections available. For example, if you have minor children, revocable trusts can provide financial assistance to cover living expenses, medical care, and education expenses until they reach a certain age, after which they receive the balance of the trust. If you own real estate in multiple states, in can simplify the sale and transfer. Since the terms of a trust can vary based on your needs, it’s important to consult with an attorney to discuss your goals and how revocable or other trusts can help you accomplish them. Contact us to schedule a consultation with our team of Massachusetts estate planning attorneys.