A revocable trust is a legal structure in which a trustee holds and manages assets for one or more beneficiaries per the terms of the trust document drafted by the person who created the trust (called a grantor). Revocable trusts allow grantors to retain the right to amend the trust document or to dissolve the trust and recover the assets placed in the trust. As a result, individuals and families in Wisconsin may incorporate revocable trusts into their estate plans to take advantage of benefits such as:
Avoiding Probate
An individual or family can use a revocable trust to pass assets to loved ones while avoiding the time and expense of probate. When a decedent passes away, the assets in their estate must go through probate before heirs and beneficiaries can inherit those assets. However, individuals can structure a revocable trust to distribute inheritances to their loved ones after death. Because the trust, not the individual, owns the assets, those assets do not go through probate after the individual’s death.
Flexibility and Control
Revocable trusts offer grantors increased flexibility and control compared to irrevocable trusts, which do not allow grantors to amend or revoke the trust. A grantor can change the terms of their revocable trust as needed in response to changed family circumstances, shifting estate planning goals, or new or amended tax or estate planning laws.
Privacy
A family can use a revocable trust to maintain privacy in their assets and wealth. Because a court supervises the probate process, a decedent’s assets become a matter of public record. However, families can use revocable trusts to manage their property and distribute inheritances to succeeding generations without needing a public court process.
Incapacity Planning
Individuals can incorporate revocable trusts in their incapacity planning. When a person becomes incapacitated due to disability, illness, or advanced age, a revocable trust can empower a trusted family member, friend, or professional to manage the person’s assets as the trustee. An individual can structure a revocable trust to instruct the trustee to distribute income and principal to cover the individual’s ordinary expenses and long-term care costs. Thus, revocable trusts can eliminate the need for a more complex and costly guardianship or conservatorship.
Simplified Estate Administration
Revocable trusts enable simpler estate administration by avoiding probate or other court processes. They can also more quickly distribute inheritances to heirs/beneficiaries. A clear, comprehensive trust document can also reduce the risk of misunderstandings or conflicts, potentially avoiding costly and time-consuming estate litigation. A trust document can also give the trustee significant discretion in managing the trust.
Contact an Estate Planning Lawyer
A revocable trust can play a critical role in your estate plan, ensuring you can manage and pass on your assets according to your goals and wishes. Let a knowledgeable trusts attorney from Peterson, Berk & Cross, S.C. help you understand the benefits of a revocable trust. Contact us today for an initial consultation with our legal team to learn more.