Advantages And Disadvantages Of A Revocable Trust
When you are planning for your estate, a trust must be on your list. However, there are different types of trusts, and choosing one that works best for you is important. Weighing the advantages and the drawbacks can help you come to a conclusion.
A revocable trust can be the perfect estate planning tool for you. You may think they are only for the wealthy, but that is only a myth. A real estate attorney in monroe nc can help you understand the benefits of a revocable trust and if it is the right option for you.
Advantages and disadvantages of a revocable trust
Advantages
- You can avoid probate.
One of the major reasons people create a revocable trust is to avoid probate. Revocable trusts avoid probate because the trust does not die with its creator or grantor. The trust remains the same after their death, and the properties are only transferred as per the grantor’s wishes. The court does not have to play a role here.
- You get privacy.
With only a few exceptions, everything that happens in a court becomes public information. If probate is held, your family’s financial information goes on public records as well, which can be unpleasant. The contents of a revocable trust are private. If you want to pass on assets quietly without unwanted prying, this is a good option for you.
- You get to choose a trustee if incapacitated.
Life is uncertain. Nobody thinks they will become incapacitated but unfortunately, many people do. When you become incapacitated, a trustee can take over and handle things on your behalf. You have the freedom to pick anyone, so you can choose someone who is trustworthy enough.
Disadvantages
- It can be expensive.
It costs more money and takes more time to set up a revocable fund than simply writing a will. However, in the end, it could end up costing the equal because probate can be expensive as well. By adding the cost of writing a fair will, one can make a good comparison between the two.
- You have to fund the trust.
Signing a trust document is not the end of creating a trust. You have to fund the trust, which involves signing new deeds to the property and transferring or opening new bank accounts. Doing paperwork and making rounds to the bank can get annoying for some people. However, this is a must in a revocable trust.
- No tax benefits.
Shifting your assets to a revocable trust won’t protect them from taxes. It also won’t protect them from lawsuits and creditors.
