If you are new to estate planning, you may not be aware that there is more than one type of trust. This is important to understand because different types of trusts limit your ability to make changes. An irrevocable trust, for example, requires approval from everyone you have listed in the trust for a change to take place. That means if you want to remove a beneficiary from your trust, that beneficiary would have to approve of your decision. Understandably, this may create complications down the road.
Revocable trusts, however, allow you to maintain control of the trust entirely while you are alive. You can alter or modify the trust in any way you wish. Keep reading for more information on the benefits of revocable trusts.
Benefits of a revocable trust
As mentioned in an article on FindLaw, there are many benefits to setting up a revocable trust, such as the following.
- You may include properties from other states into your trust
- You can specify what should happen if you become unable to care for yourself, including who should take care of your affairs
- Revocable trusts allow you to maintain control of your assets and easily make changes
- Your trust will avoid probate when you pass
- A trust does not become part of the public record when you die, whereas a will does
Other notable mentions
While the benefits of a revocable trust generally far outweigh its limitations, there are some things you should be aware of if you would like to set up a revocable trust. Namely, that creditors may still get access to your assets during bankruptcy. Additionally, any income you receive from a revocable trust is taxable.