A revocable trust allows you, or someone designated by you, to hold, administer and pass along assets while you are living, as well as after you have passed away. You are the initial trustee, controlling all of the trust assets, but if you become incapacitated, or die, the successor trustee takes over control without need of court action.
Trusts are most commonly divided into two categories. One is called a revocable trust and the other is an irrevocable trust. Most commonly individuals or couples opt for a revocable trust, which reserves the right for them to amend or revoke the trust in part or in its entirety. This type of trust usually remains revocable until the creator(s) of the trust have passed away. Once the creators of the trust, also known as Trustors, or Grantors, have passed away the trust becomes irrevocable and the successor trustees have one job, to administer the trust as it was written by the creators. In most cases, after the creators are gone, the trust acts like a will in that the trustee then has the job of distributing assets to the named beneficiaries according to the terms of the trust. If any beneficiary is a minor or is below an age designated by the creators, their share may be held in further trust for them until they reach a certain age. The creators may also designate further trusts for persons with disabilities regardless of their age.
1. Assets pass to beneficiaries without the need for probate.
2. No probate fees or increased attorney fees, which can often be greater than the typical costs of creating a trust.
3. Court action is not required.
4. Trust terms are confidential.
5. Typically shorter process than probate.
6. Trust controls assets during and after life of the Grantors.
7. If you have property in other states, a trust passes that property on without the need for further proceedings in other states.
8. It is generally more difficult to contest a trust than a will.
1. Higher up front costs over a will.
2. Major assets must be retitled into the name(s) of the trustee(s).
Whichever plan you choose, will based or trust based, I will provide you with my best advice based on your particular circumstances so that you can make the right choice for you and your family.