Estate planning is an important part of passing on your assets to your family. Other than having a will, business owners and those with larger assets may want to establish a trust to pass on their assets. Two common types of trusts people use when estate planning are revocable trusts and irrevocable trusts.
Revocable trusts are the most common type of trusts people use. They come with many advantages, including the following:
- Estate planners can change a revocable trust at any time.
- Revocable trusts don’t go through the probate process. The funds in a revocable trust pass directly to the beneficiaries without the court’s supervision.
- You set up a trustee for your revocable trust, who can manage the trust if you become mentally or physically incapacitated.
- Your assets will be available immediately after you pass away. Then your trustee can use those assets to pay for any administrative expenses quickly or pay off your debts.
- A revocable trust allows your beneficiaries more privacy, as the details of the trust’s asset distribution aren’t made public.
- You can use income earned through your trust.
- You can establish how the trust will distribute assets for a child who struggles with addiction or isn’t good with money, to protect their inheritance over the long term.
- You can eliminate challenges to your estate by specifically disinheriting anyone who challenges the wishes outlined in your trust.
An experienced estate planning attorney can help you decide if a revocable trust is a good option for you. If you establish a revocable trust, you can have better peace of mind about the future. You know you will save your family time and money in settling your estate and have ensured they receive the assets you want them to.