There are several different tools that can be a part of an effective estate plan. While a revocable trust is not at the very top of the estate planning list, it can be extremely useful for certain families. Also known as a living trust, these trusts are known for their flexibility of being modified or revoked while the person who establishes the trust (grantor) is still alive, yet the trust becomes irrevocable once the grantor dies. There are many benefits to revocable trusts, including:
Avoids probate: As with other trusts, a revocable trust enables assets to be passed on without the time and expense of going through probate.
Privacy: Any assets passing through probate become a matter of public record, while a trust enables the details of an estate to remain private. This may be important to grantors, their families or both.
Avoids multiple probates: The deceased may have lived here in Florida but owned property in another state, which means there is the potential for probate in that state as well.
Can receive other property: This trust is able to incorporate and manage property and assets from other sources (such as a life insurance policy, a will, pensions, IRAs or other trusts).
Distribution is flexible: The grantor may choose different options for each beneficiary, including the schedule and amounts.
Creditor protection: While it does not protect the grantor, this trust affords protection from suits or other legal actions to the beneficiaries.
A good arrangement for blended families: It can detail how assets are to be passed if there is more than one marriage, remarriage of a spouse and/or stepchildren involved.
Estate tax mitigation: Few of us need to worry about exceeding the estate tax threshold of $11,400,000 (single individual) or $24,800,000 (a couple) for paying taxes, but this tool provides tax relief to those who do.
Crafting a plan that works
There are many different options when it comes to trusts. The key for the potential grantor is to sit down and discuss the needs and goals of their estate plan with a knowledgeable and experienced estate law attorney who can then craft a plan that works.