You’re looking into getting your estate plan in order, but it can be hard to know where to turn with so many options. Everyone knows about wills, but a revocable living trust may hold the real answers to your planning questions.
A revocable trust is a deposit account that thrives on the flexibility it provides throughout its duration, whether you’re in good health, unable to make sound decisions or after you’ve passed on. Wills and other forms of trusts have their place, but a revocable trust may be the best option for your situation.
Trusting in the plan
This type of trust may be just what you’re looking for:
- Room to maneuver: Reflected in the name, a revocable trust gives you flexibility where an irrevocable trust does not. Your estate plan will likely change over the years, and the right trust can change with your wishes. You’ll generally have the freedom to change the beneficiaries, the trustee or the stated purpose of the trust.
- Out of commission: If you become unable to make financial decisions at any point in your life, your trust could kick in. The trustees you name can act on your behalf if you become injured or incapacitated, allowing them to handle the finances in the trust in your best interest.
- Retain assets: The assets in a revocable trust remain your own, which is what can give the trust so much flexibility. You may need permission from every person you name in an irrevocable trust to make amendments since you’ve likely relinquished ownership of the assets through its mere creation.
- Avoid probate: Since a revocable trust survives your passing, it may not be subject to probate court. This means it could continue carrying out whatever duty you assigned without waiting for a ruling from the probate court. This also means that the contents of your trust may avoid being submitted to the public record, where most probate dealings end up.
- Federal protection: The Federal Deposit Insurance Corp. may protect assets in bank accounts for a sizeable sum, but the funds in a trust could be covered to a much greater extent. And the amount of coverage can increase even higher as the number of beneficiaries rises.
Check your needs against the abilities of a revocable trust to see if it fits into your planning. It could provide the solutions you need that more concrete avenues may not be able to handle.