Creating an estate plan can feel a little overwhelming. There are so many different documents, and it is hard to know which options are the right ones for you and your family. You probably have heard of a revocable trust, but you may be unclear on what exactly it does and whether it is the right choice for you. Below are five benefits of using a revocable trust.
You can make changes
The big difference between a revocable living trust and an irrevocable living trust is you can make changes to a revocable trust. You can create a revocable trust and decide you want to make changes to the beneficiaries. You may also choose to add new assets to your trust. Or perhaps you decide to change who inherits what. With a revocable trust, you can make all these changes.
Your beneficiaries skip probate
A trust does not have to go through the probate process. This can save your estate time and money. So your beneficiaries can receive their inheritance quicker, and probate costs will not be deduced from the estate.
Your affairs remain private
Since you are skipping probate court, your estate will not become a part of the public record. If you want your financial affairs to remain private, trust gives you and your family this privacy.
You can get creative with distribution
A trust allows you a lot of flexibility with how you administer distribution. You can choose to pay out your beneficiary’s inheritance in a lump sum. Or you could have the assets paid when your beneficiaries reach certain milestones. You may decide your appointed trustee will distribute the assets on a needs basis. According to Forbes, you can protect assets going to married beneficiaries in the unfortunate event of a divorce. You may also wish to include a charity in your trust documents.
You can avoid probate in multiple states
If you own property in multiple states, you must go through probate in each state. However, if you move the properties to a trust, your estate avoids probate entirely. This will save your estate a lot of time and money.
A revocable trust may not make sense for everyone. However, it is a good choice if you want to keep your affairs private, avoid probate, have distribution flexibility and keep the ability to make changes.