In estate planning, there are many types of trusts that you can create. One of the most popular trusts is the revocable trust. This trust is suitable for people who want to have some flexibility with their estate planning, which includes control of assets.
What are revocable trusts?
A revocable trust is a type of trust that you can change or cancel if you’re the person who created it, known as the grantor. This means that as the grantor, you can add or remove assets from the trust, change the beneficiaries and even dissolve the trust completely.
Because of this flexibility, a revocable trust is often used by individuals who want to maintain some control over their estate planning. For example, if you’re worried about estate taxes or how your assets will get distributed after your death, a revocable trust can help give you peace of mind.
How do you create a revocable trust?
You need to choose a trustee. This is the person who will administer your trust and make decisions on your behalf. You can also choose a successor trustee, who will take over if the original trustee can no longer serve.
You’ll need to name beneficiaries for your trust and decide on how you want your assets distributed. You may want some or all of your assets to go to specific individuals, or you may create a charitable giving plan through your trust. After making these decisions, it’s time to create your trust document. This document will outline the specific terms of your trust and how it will operate. You’ll need to sign and date the document.
What are the benefits of a revocable trust?
There are several benefits to using a revocable trust in estate planning. Besides flexibility, a revocable trust can help you avoid probate, which can be costly and time-consuming.
A revocable trust also allows you to keep your estate private. This means that your beneficiaries won’t have to go through the public court system to receive their inheritance.
Finally, a revocable trust can help with estate taxes. For instance, if you want to leave money to your children but don’t want it to be taxed when you die, you can put the money into a trust. The trust will then pay estate taxes on the funds, allowing your children to inherit them tax-free.
If you’re the kind of person who wants control over your estate planning, a revocable trust may be the right choice for you. To have a smooth process, make sure you understand the steps of creating this trust before you get started.