Think A Will Is All You Need? 3 Reasons You Should Switch To A Revocable Trust
If you're like most people, you really don't want to think about your passing, let alone make plans about how your assets will be divided once your gone. Unfortunately, if you have a family that you want to protect, and an estate that you want to ensure is handled properly, that's exactly what you need to do. Once you're gone, it will be too late for you to protect your family, and your assets. If you're like many who think that the best way to protect your family is to divide everything up in a will, you might be mistaken. While a will does allow you to document where you want everything to go, it does little to actually protect your family, especially if you want to avoid probate. If all you have is a will, your estate will be tied up in probate for quite a while. During that time, no one will be allowed to use any part of your estate. That's why you need a revocable trust. Your trust will protect your family, and your estate. It will also allow for immediate use of assets. Here are three other ways that a revocable trust is the right way to go.
Protects Minor Beneficiaries
If you have minor children, or even children who are simply too young to handle a large sum of money in a responsible manner, a revocable trust is the way to go. These revocable trusts can be designed to hold the bulk of the estate in a protected account until your minor child reaches a responsible age, say 25 years of age. Prior to the child turning 25, a trust manager pays their living expenses, college tuition, etc., out of the trust. Once your child turns 25, the trust is transferred over to their name, and they gain access to their full inheritance.
Protects Against Problems Associated with Aging
If you're worried about what will happen once you're too old to handle your own finances, you should be. If everything you own is in your name at that time, your adult children will have no say in what happens to those assets. An unscrupulous caregiver could swoop in and take advantage of you, leaving you penniless, and your kids without an inheritance. A revocable trust protects against that. Through the trust management, your children gain access to your estate, which means you're protected against fraud, and other issues that could come up as you age.
Provides Relief from Taxes
While nothing will completely protect your estate from the IRS once you pass away, a revocable trust will provide some level of relief. Revocable trusts protect a portion of your estate when it's transferred to a spouse. That means, your spouse will receive the bulk of your estate, without inheritance taxes taking a large chunk away right off the top.