When it comes to estate planning, it's about so much more than just making out a will. Wills are important, and no estate plan is complete without one, but wills must go through the probate process, and that can bring delays and expenses. Read on to find out one solution that more than addresses the downfalls of wills and probate.
What Is A Revocable Trust?
There are many different kinds of trusts, and many of them are appropriate for estate planning purposes. The revocable trust stands out for its simplicity to create and its innate flexibility. As the name might suggest, a revocable trust can be revoked (canceled) or altered at any time, as long as the creator of the trust is still alive. Some people are unnecessarily intimidated by the term "trust," so it might be helpful to visualize a trust as a container that holds the contents of a person's estate. Everything you own, from your home and vehicles, to money in a bank account, comprises your estate, and all of it can be included in a revocable trust.
How Does A Revocable Trust Affect Probate?
A trust, and the property it holds, never has to be probated. It is an entirely separate legal action, and it takes precedence over a will. That means that, if you have the same property listed in your will and in your trust, the trust will take precedence. Here is an example:
You list a savings bond in your will and you specify that it is to go to your nephew, Charles, upon your death. You list that same savings bond in a revocable trust, and you specify that you want it to go to your niece, Charlene. Charlene will end up with the bond, because the trust "precedes" the will, regardless of when it was made.
Additionally, probate can take several months to be complete, but any property listed within a revocable trust can be distributed to the beneficiaries almost immediately after the death. A trust allows you to not only name beneficiaries, including charities, but to use detailed conditions. For example, you can specify that a child only inherit a sum of money when they graduate from college.
Who Is The Trustee?
Just as an executor is responsible for overseeing a will, the trustee oversees a revocable trust. Once the trust's creator dies, the trustee's job begins. You can name the same person to serve as both trustee of your trust and as executor of your will, but you are free to name any person over the age of 18 to do so.
Speak to an estate planning attorney to learn more about revocable trusts. Companies like Skeen Law Offices can help.