The Revocable Trust - A Key Element of a Quality Estate Plan
Last month, we discussed the value of creating an estate plan, not just creating a will. This month, we are diving deeper and discussing revocable trusts.
From Fidelity.com:
A revocable trust is a legal structure that allows the "grantor" or "trustee" to retain control over their assets during their lifetime, as well as specify exactly how and when their assets pass to their beneficiaries. After the grantor's death, the trust acts as a will substitute and enables the assets to be privately and quickly distributed without going through the time and expense of the probate process. This will allow the grantor full control and use of their home during their lifetime while providing for efficient distribution at their death. (Source)
What types of assets can go into a trust? (From Kiplinger.com)
Real estate
Financial accounts. There are several types of financial assets that can be owned by a trust, including:
Bonds and stock certificates
Shareholders stock from closely held corporations
Non-retirement brokerage and mutual fund accounts
Money market accounts, cash, checking and savings accounts
Certificates of deposit (CDs) (However, retitling a CD can trigger early-withdrawal penalties depending on the financial institution.)
Life insurance
Valuable personal property
Mineral rights
Collectible vehicles
As we have shared, the estate plan is an important tool because individual tools like wills, revocable trusts, and more all work together to protect your interests and those of your loved ones. There are items that cannot be placed in a revocable trust, like everyday vehicles, health savings accounts, uniform gifts or transfers to minor accounts. (Source: Kiplinger.com)
There are also disadvantages to revocable trusts because you retain control of the trust. (Source: Merceradvisors.com)
No protection from creditors
Estate tax considerations
The revocable trust is a key element in a strong estate plan. Contact us today to get started with your planning.