Planning how your assets will be distributed when you die is one of the most important steps you take to safeguard your future and protect your loved ones. Without a clear plan, your estate could become the genesis of a protracted conflict that can result in irreparable damage to your family.
Depending on your assets and circumstances, one of the estate planning tools you may want to consider creating is a revocable trust. Generally, this is a type of trust that can be canceled at any time by you (the grantor). In a revocable trust, the grantor becomes both the trustee and the beneficiary.
What assets can you place in a revocable trust?
Placing an asset in a revocable trust basically means that you will be retitling certain assets in the name of the trust. However, not all assets are ideal for funding a revocable trust. Assets commonly used to fund this type of trust include bank accounts, certificates of deposits, brokerage accounts, business interests, stocks, bonds and other tangible assets.
Benefits of including a revocable trust in your estate plan
A revocable trust offers several benefits. Here are some of them:
- Probate avoidance: Probate is a public process that is both time-consuming and resource intensive, which is why most people make every effort to avoid it. Upon death, however, any asset that you had in a revocable trust will bypass probate.
- Continuity management: A revocable trust is an excellent tool for controlling your assets should you lose the ability to make decisions due to illness or incapacitation. If you become incapacitated when you do not have a revocable trust or healthcare power of attorney in place, the court may have to appoint a conservator for your estate. And this can be a costly and lengthy process.
A revocable trust is a powerful estate planning tool. Find out how you can use it to protect your assets and loved ones.