The New York Times recently published an article, “Life After Your Death? Here’s Why You Should Have a Trust.” The article explained that trusts have often been thought of a way for wealthy people to dispose of their assets.
However, some trusts can be useful for those who are not ultra wealthy. One of those is a revocable trust, which can be changed during a person’s lifetime. A properly funded revocable trust can avoid the need for probate after death.
If assets that have been titled in one name, are retitled in the name of the trust, the payment of any bills will continue without interruption in the individual’s lifetime. This can work in any situation, where financial support is given to family members.
Unlike an irrevocable trust, where assets are dispersed with more permanency, a revocable trust can be changed during the holder’s lifetime, if she decides to handle her assets differently.
If that person’s financial situation changes or if she believes that she’s made a mistake, she can close the trust and void the arrangement.
The trust is similar to a will but is more private. It isn’t subject to outside review or approval. A will may need court approval, and every state has its own probate laws.
When you select a trustee, make sure the person has the time and desire to take on the responsibilities of being a trustee. Irrevocable trusts are often used for tax planning, but revocable trusts are really used for life planning.
Reference: The New York Times (March 22, 2018) “Life After Your Death? Here’s Why You Should Have a Trust”