Having a well-organized estate plan is one of the most important decisions that a Sacramento resident can make for the good of his or her family. While this is generally understood, many people are lacking the in-depth information to make the best decisions to suit their specific situation. A trust is an example of this. There are various kinds of trusts including a revocable trust and an irrevocable trust among others. Knowing how a revocable trust can be beneficial is a wise step before using it.
A trust that holds any property that is to be contingent on its provisions being met is a revocable trust. With a revocable trust, it can be changed as to its definitions even after it was created. The trust can be eliminated entirely with the assets returning to the individual. The person who takes out a revocable trust will often also be the trustee for its duration.
A revocable trust is useful in two basic circumstances. If the person is ill or incapacitated and can no longer oversee their own finances, the successor trustee can take care of them. That individual will oversee the trust. Also, the revocable trust has the person's wishes listed after he or she dies. For example, that which is in the trust can be gifted to whomever they want. This can also be used if there are child heirs who are not prepared to handle the assets and the successor trustee will oversee it until they are of age.
The revocable trust is beneficial in situations when the person believes a change in financial planning might be needed. It also avoids the need for the family to go through the probate process. A will forces heirs to go to court after the person has died. These records are public and can be viewed by others. That is not the case for revocable trusts. Revocable trusts can be more costly than other estate planning alternatives.
People who are considering their options for estate planning should know the utility of a revocable trust. Discussing the options for trusts with an attorney can provide all the necessary information to make an informed decision and make the applicable choice.
Source: The Motley Fool, "Revocable Trusts: What You Need to Know," Dan Caplinger, June 23, 2017