Benefits of Revocable Trust
As a will substitute, some people usually choose to place their assets and resources in a living trust or revocable trust. You can use a revocable trust for managing your assets while you are still alive and also afterwards. The following article discusses the benefits of revocable trust.
1. Avoids probate
The revocable trust is very beneficial since all the assets contained within the trust will not undergo probate once you die. Probate refers to the formal court procedure where a court or judge supervises the sharing of your assets. The probate process is normally both costly and lengthy, depending on the size of your assets or estate. Since a court has authority over your personal assets only, if your revocable trust possesses your assets, then the court does not have any authority over them.
2. Privacy benefits
The other huge revocable trust benefit is that assets held in this particular trust are distributed privately. Since probate cases are part of the public record, any person who wants to can look at your probate files. They are able to see the will, assets, value of assets and also the recipients of assets. However, assets in a revocable trust are normally not included in probate files. This means that your revocable trust assets will be distributed quietly by the trustee to all the listed beneficiaries.
3. Prevents guardianships
Guardianship refers to a court proceedings normally held on an individual’s behalf, particularly when that person is incompetent. In this case, other family members require going to court so that one of them is appointed as the custodian of the estate. Revocable trusts offer a mechanism where a certain legal guardian is automatically appointed if you become debilitated, therefore avoiding the burdensome guardianship court proceedings.
Regardless of what you may read or hear, the drawback of revocable trusts is the fact they are no tax advantages.