Trusts are a valuable estate planning tool. However, choosing the right type of trust for your estate planning needs is important.
Revocable trusts have some advantages that make them a better choice for many people.
Why it matters which type of trust you choose
The type of trust you establish plays a role in how much control you retain over your estate while you are alive. It also affects when and how much taxes you or your beneficiaries will pay on your estate. It determines whether your assets remain a private matter or are open to the public. It also affects how much money you spend on estate planning.
Advantages of revocable trusts
When choosing the type of trust to set up for your estate, consider the advantages of revocable trusts:
- Can amend or revoke at any time
- May change the beneficiary or trustee
- Provide leverage over the inheritance
- Avoid tax consequences for removing assets
- Provide a smooth financial transition
- Bypass probate after your death
- Keep contents private
- Are less complicated and expensive to set up than other types
When you place your assets in a revocable trust, you retain full control over them. This may be important if circumstances change after you establish the trust.
Choosing the most appropriate type of trust for your financial situation and estate planning goals can save you money, help you avoid potential problems related to the transfer of assets after you die and allow you to retain control of those assets while you live. The primary benefit of a revocable trust is that you can change your mind.