Perhaps you are nearing retirement age. You are beginning to think about the future, and estate planning comes to mind.
You worry about your family and how they would manage if something should happen to you. A friend of yours set up a revocable trust. Would that work for you?
Revocable trust basics
A revocable trust is an estate planning vehicle set up to hold your assets if you die or become incapacitated. Transferring your assets to a revocable trust keeps them from having to go through probate, saving your beneficiaries time, trouble and expense. To avoid unnecessary complications, however, only those assets that are not jointly owned or that do not have a direct beneficiary should go into this kind of trust.
At some point, a major event such as a stroke, for example, may render you incapable of handling your own affairs. In this case, management of your revocable trust would continue under the guidance of your successor trustee without the need for a court order. Should you not recover, the trust will contain your instructions as to the disposition of the assets following your death.
A living trust
A revocable trust is an inter vivos or living trust meaning one that is set up during the lifetime of a grantor. If you have concerns or if circumstances in your life change, you can revoke or alter the terms of the trust at any time. Keep in mind, however, that there are other types of trusts you might want to explore now that you are beginning to think about estate planning.