Benefits of a Revocable Trust
A revocable trust is a type of trust that can be changed or revoked by the grantor (the person who creates the trust) at any time. Many individuals chose to include a revocable living trust as part of their Naples estate plan because of their many advantages. Below are seven benefits of having a revocable trust in your Naples estate plan.
1. Avoids Probate
Revocable trusts pass outside of probate. The assets within the trust pass directly to the beneficiaries with no court involvement. Your loved one will have immediate access to their inheritance. This is in contrast to property gifted through a will, which must go through the Florida probate process, which can take months, if not years, to complete. Furthermore, probate can be costly. Attorney’s fees and court costs can quickly add up. Some probate cases end up costing their estates thousands of dollars. Generally, the larger and more complex your estate, the more expensive and time-consuming the probate process will be.
Avoiding probate is especially beneficial if you own property in multiple states. If your real estate is not in a trust, your family will typically be forced to open a probate proceeding in every state that your owned property, increasing the time and expense.
Some individuals are surprised to learn that when a will is probated, it becomes part of the public record, and anyone can learn how you distributed your property. If you want to keep your affairs private, you should consider adding a revocable trust to your estate plan. Revocable trusts are private documents that are not filed with the court. Information about your assets and beneficiaries will not be publicly available.
3. Reduce Disputes
A revocable trust can reduce the likelihood of your estate being challenged because it avoids probate. During the probate process, all interested parties are given notice and have the opportunity to challenge the will. Even if the challenge is not successful, it can cost your beneficiaries thousands of dollars to fight. Because the probate court is not involved with revocable trusts, it is much more difficult for disgruntled family members to challenge it.
4. Protects Assets During Incapacity
In addition to controlling how your property is distributed at your death, a revocable trust can protect your assets if you become incapacitated. In a revocable trust, you can authorize another individual (the successor trustee) to assume control over the trust if you become incapacitated and cannot make decisions on your own. You can include instructions in the trust for how you want the property managed, including whether the trust property should be used to pay for your care. Your successor trustee can distribute trust funds and complete tasks such as paying your bills and filing your taxes.
If you do not have a revocable trust or durable power of attorney, your family would likely have to petition the court for guardianship or conservatorship. This process can be expensive and lengthy. Even after a guardian is named, there is often continued court supervision over the management of the incapacitated individual’s assets.
A revocable trust gives you more control than a will over how and when your assets are distributed to your beneficiaries. You can include specific provisions in the trust document that specify how your successor trustee should handle the property after you pass away. For example, you can make your beneficiaries wait until they reach a certain age before they receive their inheritance. Furthermore, you could limit the use of the trust assets to education or another purpose or occasion like buying a first home. The added control of a revocable trust is particularly appealing when you have minor beneficiaries or beneficiaries with gambling or addiction problems.
You can change the terms of a revocable trust at any time. You can even dissolve the trust entirely if your circumstances change. The ability to access the trust assets if your circumstances change can give individuals significant peace of mind.
This flexibility is the primary difference between revocable and irrevocable trusts. If you establish an irrevocable trust, you lose all ownership and control over the trust assets. You typically cannot change the terms of the trust or dissolve it.
Call A Naples Trust Lawyer
If you have questions about including a revocable trust in your estate plan, you should contact experienced Naples attorney James R. Nici. He is well versed in trusts, estate planning, and trust administration. Contact our office today at (239) 449-6150 or use our web form to set up a free consultation.