And why should I have one!
Whether you have accumulated a sizable estate or not, all of us should be considering those estate-planning tools that will allow our assets to seamlessly and efficiently (and privately) transfer to your heirs. A revocable trust may be just the solution to consider.
Understanding Revocable Trusts
The greatest benefit of a revocable trust is that it allows for the independent administration of the estate and greatly simplifies the estate-planning process. When a person without a trust passes away, their property and assets must then be disposed of under supervision if not direct control of the local probate court judge. Not only can this be an inefficient time-consuming and potentially costly process, it also requires a public record to be created of the property being passed to heirs. In today’s age of identity theft and asset protection, this is not always the most desirable route for an estate plan to take. And it shouldn’t have to be-- setting up the right estate plan can actually be quite simple.
By using a revocable trust for example, you can greatly avoid this costly public process and turn it into an intentionally simple and efficient plan. The property you transfer to a revocable trust is no longer considered a part of your probate estate. It will pass to your heirs in the manner that you choose to lay out in the governing trust documents and it will do so without the need of a probate court's intervention—no judge; no probate court intervention; and no public record! This avoids the creation of a publicly available document which would otherwise require all of your estate assets to be outlined and how they are to be disposed of and to whom they are going to be received.
Another attractive quality of revocable living trusts is the ease with which they can be set up. Meeting with an estate planning attorney to discuss the specific instructions you want to give the trust and designating the right people to carry them out is quite simple and relatively quick. The crucial action step and most important thing to keep in mind is that one you set up the trust, you need to formally transfer those assets you want the trust to administer into the trust and designate who your beneficiaries are. In the case of revocable trusts, the initial trustees and its beneficiaries are all generally the grantor or grantors (typically the husband and wife) until he or she passes away, at which point a successor trustee distributes the trust's assets, first for the benefit of the surviving grantor(s), and then to the grantor’s residual beneficiaries.
The simple thing to understand is this: If you're looking for a solid legal device that will assist your estate-planning process to ensure what you want to happen will, in fact, happen, then a revocable trust may be the way to go. This is particularly true if you want the flexibility that allows you to revoke the trust and/or move assets in and out of the trust.
Abraham | Law: Experienced and Exceptional Estate Planning Representation
Michigan Estate Planning Attorney Mathew J. Abraham and ABRAHAM | LAW have been providing effective legal representation to individuals and businesses for over twenty years. If you have questions about estate planning or probate issues, you should call ABRAHAM | LAW at 810-750-0440 or submit an online request to schedule an initial consultation.