revocable trust, also referred to as a living trust, provides a means for the grantor
to designate, and modify as necessary, estate and asset beneficiaries.
Multiple advantages exist with living trusts. However, the chief utility
of a revocable trust lies in an individual’s ability to appoint
a trustee and beneficiaries, but to maintain ultimate decision-making
authority until the time of death.
Revocable trusts are a viable option anytime that an individual wishes
to have another manage his property or assets. For example, a person may
choose a living trust when using the services of a wealth management company.
This type of trust may also be appropriate for those faced with illness
Assets managed under the umbrella of a revocable trust are not subject
to probate, and can provide for a streamlined transfer of wealth and property
upon the grantor’s death. Wealth passed via a will is subject to
being contested within court, which is often an expensive and time-consuming
process for grieving loved ones. A revocable trust enables beneficiaries
to bypass many of the difficulties associated with contested wills.
A revocable trust is not appropriate in all circumstances. This type of
trust is subject to taxation and fees, both during and after the grantor’s
life. Furthermore, assets transferred within a revocable trust are not
protected from creditors. Individuals should carefully consider the implications
of transferring ownership of certain assets to other individuals, as doing
so may impact their ability to access or use these assets on a day-to-day basis.
When properly implemented, revocable trusts are an extremely effective
method of managing and distributing assets and wealth accrued over the
course of an individual’s lifetime.