At their most basic level, all trusts work by having a trustee manage property placed in the trust for the profit of the beneficiary or beneficiaries. However, there are several trusts available to individuals living in the Gainesville, Georgia, area. Before you can choose the right trust for your estate plan, you need information about what these different trusts offer.
The advantages of the revocable trust
You have probably heard of a revocable trust before. Also known as a living trust, a revocable trust is one that you can establish and control while you are still alive.
You can also use a revocable trust to help you keep as much of your estate out of probate as possible. Probate is the standard process of distributing an estate’s assets and settling the deceased’s debts under court supervision. The process can take a long time and cost significant money in court costs and attorney’s fees. But property in a revocable trust avoids probate, getting to the beneficiaries faster and costing your estate less money.
In addition, if your assets are valuable enough to trigger the federal estate tax, placing some of your property into a revocable trust can help you avoid or reduce the tax impact. Your beneficiaries will get to enjoy a larger portion of your financial legacy.
Finally, another major benefit that revocable trusts provide is privacy. All documents that pass through probate court are entered into the public record. Theoretically, anyone can access them. Since revocable trusts do not pass through probate, they remain private.
One disadvantage to revocable trusts is that they are not a shield against creditors during your lifetime or afterward. This is particularly relevant when it comes to real estate, such as your home. If you place your house in a revocable trust, when you pass away, debt collectors may be able to go after it, even after it passes to your beneficiaries.
A revocable trust may be a great tool to use in your estate planning, but it largely depends on your individual needs and goals. Your attorney can help you sort through your options to make sure you make smart decisions.