What Is A Revocable Trust?

A Revocable Trust is one of many types of trusts.  Each is designed to offer something different. As tools, these legal documents help people preserve their assets in ways that meet the needs of their estates. Trusts can be broken down into two groups:

  1. Revocable Trust
  2. Irrevocable Trust

A revocable trust can be “revoked” – taken back or edited. The biggest difference between a revocable and irrevocable trust is that you can make changes to a revocable trust. That makes a revocable trust a valuable tool for anyone who wants to protect their assets under a trust but may also want to reserve the option of making changes, such as:

  • Adding or removing beneficiaries
  • Adding or removing assets, such as when you buy a property or sell a house
  • Change who manages the trust – the trustee
  • Make changes due to changes in tax laws

What is a Revocable Trust

The definition of a revocable trust can change from one state to the next. In California, a revocable trust is a set of legal directions that allow you to protect certain groups of assets, such as property, investment portfolios, cars, etc., with the ability to change the directions within the legal framework of the trust. Most people use an estate planning attorney to set up a revocable trust so that they are sure it is created properly and fully protected by the legal structure of estate planning.

What Are The Benefits of A Revocable Trust?

There are many benefits of a revocable trust. In general, those include:

  1. Transferring ownership of assets to the trust so that you are no longer responsible (in most cases) for any taxation on those assets.
  2. Allows you to make stipulations to beneficiaries before any distribution of assets occurs. One example might be that a young beneficiary graduate from college. The trust can also be set up to help the beneficiary pay for college, so they can focus on their education rather than struggle to earn their degree while working.
  3. Allows your estate to avoid probate, which can be a lengthy and expensive process.
  4. Provides for management of your finances in event of your incapacity or disability to minimize necessity for a complicated conservatorship.
  5. Revocable trusts allow you to make changes to their structure, with the help of an estate planning attorney. There are legal limitations, but unlike an irrevocable trust, a revocable trust can be altered so long as the rules are followed.

What You Can Do

If you want to explore the power and options that a revocable trust or any type of trust may have for your estate, then consider discussing your estate and its needs with an estate planning attorney.

As mentioned, there are many types of trusts and some can be tailored to fit your financial needs. Every estate is different and the legal limitations and options will vary from one estate to the next.

Contact Charles Stark For More Information About Estate Planning

Mr. Charles Stark is an attorney and counselor at law who specializes in estate planning. He and his firm serve the greater Sonoma, County of California by helping clients understand their legal rights and options. Call the office today to see what estate plan is best for you.

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