Gone are the days where trusts are a luxury, available only to rich families with wealthy estates. Revocable trusts serve as a mechanism for securing estates for a variety of families, and can be especially beneficial to young couples. As your family grows, accumulates assets, and becomes financially stable, it is important that you have an estate plan in place that has the flexibility to accommodate you and your family during your life, and will continue to provide for your spouse and children after you are gone. Here are three reasons young couples should consider a revocable trust:
- Flexibility: Life is unpredictable. So young couples need flexibility when creating an estate plan for their family. A revocable trust provides that flexibility. Unlike other estate planning tools, a revocable trust allows you to add and remove assets to and from the trust throughout your life. You will have flexible distribution preferences to ensure your estate is divided appropriately among your beneficiaries. You will be able to set a practical principle distribution schedule, while also allocating to your beneficiaries the necessary income to support room, board, medical coverage, and education expenses.
- Certainty: Rest assured that your estate will be administered exactly as you intend it to be. With a revocable trust you can assign a co-trustee, such as a bank or trust management company, who can take care of the more complex financial issues, while a family member or friend can work with your beneficiaries to coordinate the distribution of assets. Another way a revocable living trust can enhance your estate plan is that unlike a will, it cannot be contested in probate court. When you die with a will and that will is submitted to the probate court, it is very possible that the validity of some or all of the will may be challenged by one of your heirs or beneficiaries. By contrast, challenging a revocable living trust is not an easy task.
- Preservation: You spend your entire life building your estate. A revocable trust is the perfect tool to preserve your assets so that they can continue to support your family after you are gone. By placing your assets into a revocable trust, you can and should require the trustee to actively manage your investments pursuant to the instructions laid out in your trust, which should include the guidance of a professional financial advisor or institution. This can provide for the productive investment of your assets and increase their value to the advantage of your beneficiaries. A revocable trust also serves as a barrier to protect your beneficiaries from creditors and litigation. While you are alive creditors can make claims against the assets in the trust, but this power disappears after your passing because the trust becomes irrevocable. More importantly, they also cannot go after beneficiaries of the trust for assets before they receive them. Additionally, tax benefits are available with a revocable trust. If a couple have assets greater than that of the current unified tax credit, a revocable trust can provide estate tax savings.
Individual situations require more analysis and discussion before deciding on a revocable trust, so please contact the attorneys at Kohrman Jackson & Krantz to set up a time to discuss any questions you have about your estate plan, including revocable trusts.