A will is often created alongside a revocable living trust. A trust allows you to appoint a trustee who will take ownership of your assets. However, you will retain control over your assets during your lifetime. You can modify or change the trust terms whenever you want, and you can use or sell the assets if needed.
Though often beneficial, there are some limitations to keep in mind. That’s why it’s important to consider both the benefits and disadvantages before deciding whether or not to create a revocable living trust.
Benefits and disadvantages of a revocable living trust
The following benefits of creating a revocable living trust are worth considering:
- You are securing your privacy. Probate proceedings for an estate are open to the public. Your information is kept private. Because you have already chosen a trustee, there is no need for your estate to go through probate.
- The assets included in your living trust are not subject to probate following your death. Instead, because you have already named a trustee, the trust is still operational.
- If you become incapacitated while you are still alive, your designated trustee will be able to take over and manage your household and ensure that your assets are distributed to your beneficiaries in accordance with your final wishes.
On the flip side, the following disadvantages include the following:
- Creating a living trust can be a costly and time-consuming process. To transfer ownership of assets such as vehicles, stocks, and bank accounts to the trust, you’ll must reissue the deeds and titles in the trustee’s name.
- Assets held in revocable trusts don’t benefit from the same protections from creditors that assets held in an irrevocable trust do.
Seeking personalized legal guidance can help you to accurately assess whether creating this kind of trust could help you to realize your goals, whatever they may be.