A revocable trust can be a valuable part of an estate plan for many residents of Kansas City. In a revocable trust, a person known as a trustee (which can be the individual who created the trust or another person) manages the property placed in the trust and can revise the trust if necessary up until the creator’s death. In some cases, assets in a trust can be passed onto the trust beneficiaries quicker than if the individual had created a will that would have to go through probate first.
The above information is just the basics about revocable trusts. In actuality, there are many nuances to trusts that a person should familiarize themselves with before creating one. For this reason, it is often helpful to retain an attorney when creating a trust, who can educate you on how the trust will operate and can draft sound estate planning documents.
For example, certain types of assets such as life insurance policies or certain types of bank or retirement accounts do not go through probate, but instead are paid out to the account holder’s beneficiaries upon the account holder’s death. However, it can be beneficial in some cases to name not an individual, but the trust, as the beneficiary to the account. This is because when the trust is the beneficiary, it allows the creator of the trust to dictate how they want the account or policy benefits to be passed on to their heirs.
Another complicated issue when it comes to living trusts is that of privacy. In general, unlike a will that will become part of the public record once it is probated, trusts do not go through probate and therefore will not become public record. However, if an heir files a lawsuit contesting the provisions of the trust, then the trust may become part of the public record.
As you can see, creating a revocable trust can be a complex endeavor. Individuals interested in doing so should make sure they understand all the ins-and-outs of living trusts in their state before proceeding.
Source: Bankrate, “6 surprising facts about a living revocable trust,” Judy Martel, accessed Feb. 15, 2016