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FAQs about revocable trusts in your estate plan

On Behalf of | Jul 10, 2024 | Estate Planning |

When planning your estate in Pennsylvania, you might consider including a revocable trust as part of your strategy. A revocable trust, often used for managing assets during one’s lifetime and distributing them after death, offers flexibility and control. 

It is important to know the answer to some common questions to help you understand if this tool is right for your estate planning needs.

What is a revocable trust?

A revocable trust is a legal document that allows you to place your assets into a trust while maintaining the ability to alter or revoke the trust during your lifetime. You can manage the trust’s assets, change terms, or even dissolve the trust entirely if you choose. This flexibility makes revocable trusts a popular choice for many people when planning their estates.

Why should I consider a revocable trust?

Including a revocable trust in your estate plan can offer several benefits. One key advantage is avoiding the probate process. Assets held in a revocable trust do not go through probate, which can save time and money after your death. Additionally, a revocable trust provides privacy since the contents of the trust do not become part of the public record, unlike a will. Trusts also allow for continued management of your assets should you become incapacitated, ensuring that your financial needs are met.

How does a revocable trust work?

When you create a revocable trust, you transfer ownership of your assets to the trust and name yourself as the trustee, which allows you to continue managing the assets. You also designate successor trustees to manage the trust if you are unable to do so and beneficiaries who will receive the trust’s assets after your death. Because the trust is revocable, you can make adjustments as your circumstances or wishes change.

What are the differences between a revocable trust and a will?

Both revocable trusts and wills allow you to specify how your estate should handle your assets after you pass away. However, a will becomes effective only after your death and must go through probate, while a revocable trust takes effect immediately upon creation and bypasses the probate process. This difference can make a revocable trust more appealing for those looking to manage their estate privately and efficiently.

Revocable trusts offer a flexible and efficient way to manage your assets both during your lifetime and after your death. By understanding the basics and benefits of a revocable trust, you can make a more informed decision about whether this estate planning tool is suitable for your needs.