These days, many people doing estate planning prefer a revocable trust to a regular one-time will or irrevocable trust. Although revocable trusts in North Carolina are similar to a will in that they both make a plan for how your estate is handled in the event of your death, the revocable trust has additional benefits.
Revocable trusts provide benefits in the case that the grantor is incapacitated, can be changed or even canceled, giving them flexibility in case something happens to warrant the shift. This is a huge advantage over traditional irrevocable trusts and wills.
If you need help with estate planning and setting up a revocable trust, the team at McCollum Law is here and ready to help.
What Exactly Is a Revocable Trust?
A revocable trust is a trust containing assets to be transferred to the beneficiaries upon the grantor’s death. In the meantime, the grantor or originator of the trust retains control, including receiving all interest from the trust.
Unlike some trusts granted from a will, a revocable trust can be changed, or even canceled. There’s a trustee responsible for dispensing the assets of a trust after the death of the owner.
Nothing in an irrevocable trust can ever be moved for any reason, but the revocable kind has more flexibility.
What Are the Advantages to a Revocable Trust for Estate Planning?
For one thing, revocable trusts make it so that beneficiaries can obtain the assets in a revocable trust much more quickly since the beneficiaries generally don’t have to go through a probate court, conservatorship, or guardianship to make the transfer.
This is important because it avoids the time, expense, and effort related to transferring assets when you die.
It also allows you to avoid multiple probates if you happen to have real estate assets from more than just one state. Trying to plan for probates in multiple states, each with different rules and procedures can be a real pain, after all.
This is more efficient in general, and it also makes it easier for your estate to be managed effectively by your trustee.
Benefits Related to the Court
If you use a revocable trust, it makes it so that the court can’t interfere if you become incapacitated, or after you die. This is much more of an issue when it comes to irrevocable trusts. The revocable type allows you to assert more control over what happens in the future.
You can keep your family from having to endure a public court appearance or process by going this route instead. Revocable trusts don’t require court involvement in that way at all. This will make it so that your family doesn’t have to worry as much over what happens to the assets since the transaction will go much more smoothly without probates.
If you go with a revocable trust, then you can be sure that you won’t disinherit one of your beneficiaries by accident due to a change in the situation.
In terms of structure, you can put all of your assets into one overarching trust. It’s just one plan, with one instructional list for your beneficiaries and trustees to follow.
This approach also makes it so that it’s easier to make sure that your assets are distributed as fairly as possible among those that you designate as beneficiaries.
Having extra flexibility is always desirable when it comes to estate planning. A revocable trust gives you a number of choices as far as flexibility. For example, you can designate that assets will stay in a trust until your beneficiaries are old enough to receive the assets long after your death.
You can make it so that assets are shielded from creditors for your beneficiaries. In fact, you can protect assets from many things that might make it so that they don’t actually end up in the hands of your beneficiaries. This includes trustees or someone else spending inappropriately, spouses trying to get access, the fallout from divorce, or a spike in taxes in the future.
You can even protect the assets of children who are still minors from being taken as a result of a court suit.
Considerable Protection Advantages
In fact, it even goes further than normal asset protection. For example, it’s significantly more difficult to contest and try to overturn than what you get with a will. This way you don’t have to stress about trying to counter anyone who might want to contest your wishes ahead of time.
On top of all of this, a revocable trust helps protect from prenuptial agreements. You get a lot more protection against prenuptial arrangements than many other options that are out there.
The fact that you can change or cancel the trust at any point as long as you are still alive and still deemed competent is another advantage. It means that you aren’t locked in due to one mistake you made during estate planning in the past that could bother you and your descendants forever.
You can designate a professional asset management service as your trustee under this approach if you so chose whereas it would be difficult to do this otherwise.
This type of trust is also often easier to use if you want to plan around taxes on the state or federal levels. Other options make this difficult and complicated since you often have to plan for multiple different situations in different states.
A revocable trust just has a tendency to simplify matters like taxes so that you don’t have to worry.
Contact Our North Carolina Revocable Trust Attorneys
In general, a revocable living trust gives you a huge amount of control over your assets during your life while still allowing you to make sure that they are distributed in the manner you want after you pass. You can even plan for what should happen if you become incapacitated while still living. There are few options that will give you this kind of peace of mind that you won’t make some mistake that you can’t ever correct, or that things won’t go the way you plan.
Estate planning can be a difficult task to accomplish given the sheer number of variables to consider. That’s why it’s important to get the right team on your side to guide you – McCollum Law is here and ready to help. Contact us today for your estate planning consultation at 919-861-4120.