Revocable trusts can be a vital tool to an individual’s estate plan. A revocable trust allows for an individual to maintain control of their assets while preparing their estate to avoid the probate process upon death. Since the trust is revocable, the settlor – the person that creates the trust – may revoke or change the trust as needed.
Revocable trusts are “contracts” that allow a person to pass their assets to their intended beneficiaries without probate and the costs associated with the court process. With a revocable trust, a person places their assets, such as their home and bank accounts, in the trust to be administered by the trustee for the benefit of the beneficiaries. The trust contains instructions for how the trust assets are used during the person’s lifetime and then upon the person’s passing.
A trustee is the person responsible for administering the trust. As long as the person creating the trust is capable, they can serve as their own trustee during their lifetime and retain full control over the management of the trust’s assets. If the person that creates the trust becomes incapacitated, they continue to benefit from their assets that are in the trust but the management responsibilities would be passed to the next trustee named in the trust. Trusts are also confidential documents that do not have to be admitted to probate where they would become a public court record. In fact, a person can set rules to determine who is entitled to a copy of their trust.
