A revocable trust is an important estate planning tool. These trusts are set up while the trust maker, a.k.a., the grantor, is still alive. After formalizing the trust within a legal document, the grantor will transfer assets to the ownership of the trust and becomes the initial “trustee” who administers and manages the trust.
With a revocable trust, the grantor retains the right to remove and reclaim ownership of property contained within the trust as long as he or she remains alive. The main benefits of a revocable trust come when the trust creator passes away.
The assets held within a revocable trust will bypass probate proceedings and go directly to the named beneficiaries, who will be referenced within the trust paperwork. This transfer of assets after death will also benefit from the privacy that comes with trusts, as the dispensation of the trust assets will not be a part of the public record as is the case in probate.
Revocable trusts are not the best estate planning vehicles for protection of assets from creditors. Nevertheless, holding assets in a revocable trust could require additional legal steps on the part of creditors who wish to gain access to the funds. Eventually, a revocable trust will serve as protection from creditors after the grantor passes away and the trust converts into an irrevocable trust.
If you have further questions about revocable trusts and whether such a trust could be appropriate for you and your family, our estate planning law office is available to help you with all of your estate planning and trust-related needs.