Estate Planning Lawyer
A revocable living trust is a document that allows you to maintain control over assets and your estate even after your passing. As it is revocable, changes can occur throughout your lifetime, meaning that you can continue to add assets and access to the trust. However, as with every trust, you do not technically own the assets once they are with it. Determining whether a revocable trust is right for you and your beneficiaries is a matter of weighing the pros and cons.
Why Consider a Revocable Trust
There are several reasons to consider a trust: protection, financial savings, privacy and spending. Placing an estate into a trust is primarily about protecting your assets. Using a revocable trust is about that protection as well, but it extends to beneficiaries.
If you worry about how a beneficiary will spend their portion of the estate, or how quickly they will run through it, then a revocable trust provides some restrictions. You can appoint a trustee to look out for the well-being of the trust. They will make sure that the distribution of funds adheres to your wishes and not the whims of an over-eager beneficiary.
Trust also limit estate taxes. Since the ownership of the trust does not technically lie with you, the funds and property within the trust are not part of any estate taxes owed. The assets within the trust are also protected from debt collectors or other interested parties because of the lack of ownership.
Why Avoid a Living Trust
While a living trust, both revocable and irrevocable, have distinct advantages, there are several disadvantages to them as well, as an estate planning lawyer in Memphis, TN like one from Wiseman Bray Attorneys would explain. For one, living trusts are not cheap. The complexity of establishing a living trust means you will undoubtedly require legal help from an estate attorney. Without considering the cost of an attorney, a living trust may cost a minimum of $2,000 or more.
A living trust also requires constant maintenance through trust books and records, meaning that your job is far from over after creating the trust. You will need to retitle any property that is transferred to the trust, which may also cost more money.
You have the option to retain ownership by becoming a trustee, but in doing so, you limit the level of protection. If a court sees you as an owner, then the assets within are subject to collections or other legal matters.
A revocable living trust is not for everyone, but many people will benefit from its creation. To know if such a trust is beneficial to you and your heirs, talk to a qualified estate planning attorney.