If you are worried about how your heirs will manage your estate once you are gone, a revocable trust can help you address these concerns. Here is how it works.
After establishing a revocable trust and appointing someone to manage it on your behalf, you can then proceed to move your assets and properties there. Any proceeds from the trust will go to you or other designated beneficiaries.
Additionally, legal ownership of these assets will be transferred to the trust, although you still have the power to add or remove assets held in the trust.
When done right, a revocable trust can be beneficial in several ways.
Avoiding probate
The court process of distributing your assets after you are gone is called probate. It can be costly and time-consuming, but it is not always compulsory.
With a revocable trust, assets in it do not have to go through probate. It means that your beneficiaries do not have to wait for the conclusion of probate to start benefiting from the assets.
Privacy
Unlike a will, whose details may be accessible to the public, the terms of a trust are only privy to its members. Therefore, if you value your privacy and want to keep your family’s financial details away from the public, you should consider having a revocable trust.
Greater flexibility and control of your estate
A revocable trust gives you greater flexibility on how your estate will be managed. You can alter the terms of the trust at any time — from the assets held in it to the beneficiaries. You even have the power to dissolve the trust should you wish to do so.
In addition, a revocable trust can provide ongoing asset management for the beneficiaries. As a result, your assets will be managed according to your wishes even when you are gone.
Making the right call
As with any estate planning tool, you need to make sure that a revocable trust will work for you. Once you ascertain that, you need to choose the right type of revocable trust that will meet your needs, given the several options available.