From an estate planning perspective, there are many ways to ensure that your loved ones receive your assets upon your death.
While many people rely on a simple will, as it's often the easiest to create, you shouldn't assume this is your only option. For example, you may come to find that a revocable living trust is exactly what you've been searching for.
Unlike a will, with a revocable living trust, you're moving assets into the trust during your life. Furthermore, since the trust is revocable, you have the power to bring it to an end at any point.
What are the benefits?
Before you decide in favor (or against) a revocable living trust, you should first understand the benefits. As you compare these to other options, such as a will, it becomes easier to decide if it's right for you.
Here are some of the top benefits:
- Avoid probate: The thought of your loved ones facing the probate process after your death may be enough to make you upset. Not only can this take a long time to complete, but it's also costly. A revocable living trust allows your estate to avoid probate entirely.
- Peace of mind during incapacity: You hope you never face an incapacity, but this could happen at some point as the result of an illness or injury. With a trustee in place, this person can take over your affairs during this difficult time.
- A higher level of privacy: You shouldn't assume that a will provides the privacy you're seeking, as it's public record. A revocable living trust, however, is not public record, meaning outsiders will not be able to see the decisions you have made.
Ask and answer these questions
With the benefits of a revocable living trust in mind, it's time to address a few key questions:
- Are you okay with the idea that it typically takes longer to create a revocable living trust than a will?
- Are you comfortable with the fact that a revocable living trust requires you to be "hands on" with your estate?
- Do you understand the tax and other financial implications of a trust?
If you have reason to believe a revocable living trust makes sense for you and your family, answer the most important questions, learn more about the creation process and proceed in the best way possible.