This is the second post in our series on trusts. The first post described the use of Testamentary and Incentive Trust provisions. Revocable Trusts and their role will be the subject of this post. Revocable Living Trusts or sometimes known as living trusts are often know as “will substitutes” and provide several unique advantages.

Keeping your financial matters private is often a concern of people who have acquired an above average level of wealth. Upon death an individual’s assets are collected by the Personal Representative of the deceased (identified by the will or if not chosen determined by the probate court) and this list is presented to the probate court to transfer these assets to the intended heirs. This Probate proceeding is a matter of public record and is available for all to view. For those who have kept matters of this type private it can be a matter of some concern and provide an opportunity for those who may desire to take advantage of heirs who are vulnerable.

Assets placed (titled) in the name of Revocable Trust will pass to heirs with no public knowledge as these assets pass by contract rather than the probate court. Some will point to the cost of probate as an expense to be avoided. While this is true, many attorneys suggest that the difference in a well organized estate may be minor. In any case the costs to transfer will be at the low end if in a revocable trust.

Another less touted benefit I feel is a vital advantage in our aging society is the ability to name a co-trustee or successor trustee in the document. This allows for a trusted advocate, identified in advance, to step in when you are less able to manage your own affairs. A well drafted Power Of Attorney can also be used but in our experience Revocable Trusts are less cumbersome and easier for the intended party to act. A co- or successor trustee will be part of the titling process when everyone is able to speak for themselves and financial institutions can become familiar with all parties in a non-stress filled environment.

One of the biggest problems with Revocable Living Trusts is that assets did not ultimately get transferred to the trust name. Current advisors should be empowered to transfer current and future assets to the Revocable Trust name. Of course, titling new acquisitions of property is important too. It is a good idea to have a Pour-Over Will in place in the event there is an asset that did not get correctly transferred to the trust.

By their very title “Revocable” means you remain in full control of your assets while you are able to do so. All the provisions you would normally put in a will can be put in a Revocable Living Trust. You give up no control of assets and are free to buy and sell assets per your wishes. Revocable Living Trusts provide many benefits in the form of privacy, wealth transfer and costs. Proper legal advice is critical when forming any legal structure and Revocable Trusts are no different.

For more information, please read more posts from of our series on trusts using the link below.

Top 10 Reasons to Establish a Trust
Revocable Trusts in a Wealth Management Plan
Irrevocable Trusts in a Wealth Management Plan
Charitable Giving using Trusts in a Wealth Management Plan
Special Needs Trusts
Passing Real Estate on to the Next Generation with Trusts

White Oaks Wealth Advisors offer trust services to clients throughout the United States from its offices in Minneapolis, MN and Longboat Key, FL.

The foregoing content reflects the opinions of White Oaks Wealth Advisors and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

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