What is a Revocable Trust?
A revocable trust is one of the estate planning tools that can help you give directives for how you would like your assets to be distributed after you pass away. This tool isn’t reserved only for wealthy people since it offers various benefits. An experienced estate planning attorney in Woburn could thoroughly discuss with you the value a revocable trust can provide.
You can create a revocable trust, name yourself as the trustee (person who manages the trust), and then transfer assets into the trust. You’ll maintain ownership of those assets and can continue to access them.
The revocable trust is incredibly flexible. You can change the trust’s terms during your lifetime. You can put an asset in the trust and take an asset out of the trust. You can even dissolve the trust entirely if it no longer serves its purpose. This flexibility makes a revocable trust a popular choice for many people when planning their estates.
How Does a Revocable Trust Work?
The person who creates the trust is called the “grantor.” As the grantor, once you create a revocable trust, you can appoint yourself as the trustee and then transfer assets to the trust. This arrangement enables you to continue managing the assets throughout your lifetime. You’ll also designate a successor trustee to take care of the assets if you become incapacitated or pass away. If you prefer, during your lifetime you can name someone else as the trustee and that person will manage the assets in the trust.
You’ll also include the names of beneficiaries–the people you want to leave assets to after your death. By working with a knowledgeable Woburn trust lawyer, you can be assured that your revocable trust will be done to properly execute how you want your assets to be distributed after you pass away.
The trust remains private and becomes irrevocable upon your death. So, after you pass away, the trust can’t be changed.
It’s important to have a good basic understanding of revocable trusts, so you can decide if incorporating one into your estate planning is the right move for you. Let’s start off by talking about the role of the trustee.
Role of the Trustee
The key responsibilities of a trustee include the following:
- Managing the financial affairs of the trust
- Adhering to the directives provided by the grantor outlined in the trust
- Controlling and protecting trust property
- Managing the division of the assets to the beneficiaries after the grantor’s death according to the grantor’s provisions and doing so in a reasonable period of time
- Acting in the best interests of the beneficiaries
- Maintaining accurate records of all transactions and activities related to the trust, and not commingling the trust’s funds with personal funds
- Keeping beneficiaries reasonably informed about trust business and accounting of the trust
Legally, a trustee has a fiduciary duty to exercise due care and diligence. That means a trustee needs to act reasonably and competently in all matters of trust administration. In fact, a trustee may become personally responsible for trust losses if they fail to exercise reasonable care and skill. Sometimes a trustee is also a beneficiary of the revocable trust. It’s a good idea for a trustee to seek legal guidance from a skilled trust attorney in Woburn to minimize conflicts of interest.
When to Consider a Revocable Trust in Estate Planning
Determining whether a revocable trust suits you depends on several factors, including your estate planning goals, personal and financial circumstances, and concerns about probate and privacy. You might find a revocable trust beneficial if:
- You desire to exercise a higher degree of control over your estate plan.
- You want to avoid probate, which takes a lot of time and costs money.
- It’s important to you that your estate planning remains private. Once probate is filed, the will becomes public knowledge and anyone can get a copy of the will.
- You’re a married couple who will be affected by estate taxes. An AB trust can help minimize estate taxes.
With careful consideration and professional guidance from an experienced estate planning attorney in Woburn, you can decide if a revocable trust aligns with your estate planning objectives.
What Assets Can Be Transferred into a Revocable Trust?
Once you transfer assets into a revocable trust, you’ll change the ownership of the assets to the trust’s name, guaranteeing their proper management and distribution. The following assets are suitable for transferring into a living trust:
- Real estate
- Personal property
- Bank accounts
- Bonds and stock certificates
- Non-retirement brokerage and mutual fund accounts
- Annuities
A trust lawyer in Woburn can guide you on the steps involved in transferring the assets to minimize any legal mistakes.
What is the Difference Between a Revocable and Irrevocable Trust?
There are two basic types of trusts: revocable and irrevocable. The primary variation between a revocable and irrevocable trust is that the former is easy to change during your lifetime. On the contrary, you can’t really change an irrevocable trust once you establish it. Irrevocable trusts are more rigid, and while certain changes might be possible, the trust’s beneficiaries would have to agree to the changes and the approval of the court may be needed.
The rigidity of irrevocable trusts can be a downside, but they provide more protection than revocable trusts. They have more tax benefits for larger estates and protect your assets from creditor claims. Our experienced trust lawyer in Woburn can provide deeper insights into the differences to help you make an informed choice.
What Are the Benefits of a Revocable Trust?
While creating a revocable trust is a matter of personal choice, keep in mind it provides several benefits that you’ll find worthwhile.
- Flexibility and control: A revocable trust enables you to retain control over the assets while you’re alive. You can amend, alter, or revoke the trust anytime during your lifetime.
- Avoidance of probate: One primary reason people opt for a revocable trust is to help their beneficiaries bypass the probate process. Once the trust becomes irrevocable after the grantor’s death, the assets can be transferred more quickly to the beneficiaries without court intervention, saving time and money.
- Privacy protection: Revocable trusts maintain privacy, unlike wills, which become a public record during probate. Your estate’s details stay away from the public eye after your death.
- Planning for incapacity: With a revocable trust, you can designate a successor to manage the assets if you become incapacitated. That helps ensure your financial affairs are well taken care of according to your needs without needing to spend money and take the time to pursue a conservatorship.
Having a revocable trust as one of your estate planning documents can give you peace of mind, knowing you and your family will be taken care of according to your precise specifications.
Let Our Skilled Trust Lawyer Help You Establish a Revocable Trust
A revocable trust lets you retain control over your assets during your lifetime, protecting your interests concerning your estate. Before establishing a revocable trust, it’s best to consult an experienced Woburn trust lawyer for an overview of how trusts work and their legal nuances.
The Heritage Law Center, LLC, is a reputable estate planning law firm with a knowledgeable trust lawyer. Our team can assess your estate planning needs and guide you so you can make an informed choice about what estate planning is best for you. Call us today at 617-299-6976 and get the legal guidance you need for peace of mind and your family’s future.
