Revocable Trusts: The Wallet That Protects Your Family From Probate
Most people want to avoid the court system getting involved in their estate, but they don't know how to do it. Some simply tell their family what to do and cross fingers it's follow after they pass. Others leave sticky notes on items with a person's name. Some even go so far as to write what they hope is a Will on a sticky note, in a notebook or journal, or scrap of paper before leaving on a trip. None of these things, however, will avoid the court system. This is where the Revocable Trust comes in.
A Revocable Trust (often referred to as a "Family Trust" or "Living Trust") is the legal mechanism designed to avoid the court process that takes place when someone passes, known as probate. Its primary focus is to recognizes the person who created the trust and currently owns the property (called the "Trustor"), and appointing a person to be in charge of distributing the Trustor's assets (called a "Trustee"). A Revocable Trust then dictates how the Trustor wants their assets to be distributed. When you create a Revocable Trust, you become the Trustor and the Trustee, meaning you not only own the assets and control the trust itself, but continue to manage your assets the same as you always have - you do not give up any interest or authority over your own property. In other words, after you create a Revocable Trust, you do not change how you treat your property. Instead, a Revocable Trust is designed to take effect after the Trustor passes away, at which point it becomes a locked-in legal tool.
The Revocable Trust can cover a vast array of issues and concerns the Trustor may have. It can dictate who the Trustor wishes to give assets to and how much, such as real estate, money and other financial accounts, and even specific personal items. It can specify how much a Trustor's children should receive, if they wish to give to charity, whether real estate should be sold or kept in the family, and, in rare instances, even specify who in Trustor's life should not receive anything. A Revocable Trust can also include personal wishes and state why the Trustor wishes to distribute assets in their own way. It can be crafted to reflect personal and religious beliefs and represent them to the Trustor's family after passing.
A Revocable Trust has another advantage - it can be modified and changed while the Trustor is still alive. Has the Trustor changed banks? Rolled their retirement into another account? Sold their home and purchased another? A Revocable Trust allows for those changes, and it is highly recommended the Trust be updated to reflect those changes.
A Revocable Trust, when seen as a legal wallet, is only as good as the Trustor uses it. Just like a new wallet needs to be filled to serve its purpose, having a Revocable Trust in place is only half the process. The Trustor needs to "fund the trust", meaning put their assets in the name of the Trust. Although the process is relatively simple, it is highly important to ensure the Revocable Trust does exactly what you intend. Click here to learn more about funding a Revocable Trust: The Importance of Funding Your Trust — Groneman Law Firm, PLLC
If you do not have a Revocable Trust in place, be sure to contact us to get started and protect your legacy. Remember, you can't take it with you.
