How Revocable Trusts Can Be A Powerful Estate Planning Tool
Posted August 2, 2021
A common misconception is that trusts are only for the elite and wealthiest. Still, in reality, revocable trusts are valuable estate planning tools for anyone looking to take the burden of a long and painful probate process off of their family members. Put yourself in their shoes; you’ve just lost a loved one, you’re swimming in grief, managing funeral expenses, and medical bills, and now you have a lengthy probate process, legal disputes, and family squabbles over these owned assets. Or, you could restore a sense of privacy, remove the burden of a probate process, and allow your family to heal.
What is a revocable trust?
A revocable trust is established when a grantor signs a trust agreement acknowledging a person and/or corporation as an administrator to the trust. While the grantor retains the rights to this trust during their lifetime, it typically allows the property to be managed for the grantor’s benefit. (Source: Fiduciary Trust International)
However, revocable trusts allow the grantor (or trustor) to change their mind at any point in time. The grantor may change the instructions, remove assets, add assets, or terminate the trust at any moment.
What are the benefits of revocable trusts?
One of the main benefits of a revocable trust is to avoid the probate process. When your family is already grieving, adding the stress of a probate process can only add to their pain. However, with a revocable trust, your beneficiary will already be determined and eliminate the need for this.
A second benefit to a revocable trust in your estate plan is the added sense of privacy. A will is a public record, and anyone will have the ability to come by the courthouse and find out what you left and to whom you left it. However, a trust is not a public record and can only be made so by an heir or trustee challenging the trust’s validity.
Additionally, revocable trusts plan for mental disability by allowing your trustee to manage your properties while still alive if you become mentally unable to do so. The trust documents will explicitly state at what point you are to be considered mentally unfit to run your affairs and at which point your trustee will manage them on your behalf.
How do I know if a trust is right for me?
Revocable trusts can be very important to people who own real estate in multiple states, own businesses, or have concerns about family members disagreeing over assets once you die. Whether you choose to use a trust or not, it is critical that you use proper asset titling and beneficiary designations to help your loved ones avoid probate for your assets.
Thayer Financial can help you talk through the estate planning process and decide whether or not a revocable trust is the right decision for you and your family. As a fee-only Registered Investment Advisor, it is our duty to operate as a fiduciary 100% of the time. You can rest assured that as you’re talking with our team about your estate plan and the decision of whether or not to set up a revocable trust, we are working with your best interest in mind.
Thayer Financial is ready to advise you on your estate planning options from the perspective of comprehensive financial planning. As financial advisors in Hickory, North Carolina, Thayer is your dedicated resource for fee-only, fiduciary advice. Schedule an appointment or call us today.
Thayer Financial, L.L.C. (“Thayer Financial”) is a registered investment adviser offering advisory services in the State of North Carolina and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. This website’s presence on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Thayer Financial in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or according to an applicable state exemption.
All written content on this site is for information purposes only. Opinions expressed herein are solely those of Thayer Financial, L.L.C., unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.
