Revocable trusts are a great way to keep your records and asset information private after you pass away. The succession process that wills are subject to can make your estate an open book, since the documents entered in it become public records, which can be accessed by anyone. If you are single and have assets titled to your exclusive name, you should consider creating a revocable living trust.The two main reasons for this are to keep you and your assets out of court-supervised guardianship and to allow your beneficiaries to avoid the costs and complications of probate. When deciding if you need a revocable living trust instead of a simple will, there are some factors and situations to consider.
Unlike an irrevocable trust, which generally cannot be revoked or modified, a revocable trust offers flexibility during the life of its creator. In these situations, parents should consider establishing a revocable living trust and designating the trust as the primary or contingent beneficiary of the life insurance or retirement account. You can also create an irrevocable living trust, but this type of trust cannot be revoked or changed, and this type of trust is done almost exclusively to obtain certain tax or asset protection results, which are beyond the scope of this summary. By placing assets (such as a home, cottage, or business interest) in a revocable trust, or by naming the trust as a beneficiary in non-testamentary accounts, such as life insurance or brokerage accounts, your assets will be distributed according to your wishes and without judicial oversight. When you set up a revocable living trust, you usually have to make some decisions about who will act as trustee when you leave. In addition, beneficiaries may not be able to access assets fixed in a probate estate as easily as those in an active trust. The minimum net worth needed for a single person to consider using a revocable living trust will vary from state to state.
Having an active trust is important in the event of an accident or sudden illness, as it will help ensure that your assets are managed according to your wishes and that your designated beneficiaries can receive them. The trustee could manage the assets of your active trust and distribute them according to your instructions without supervision or court participation. Once the trust is created, all assets (your home, bank accounts, and stocks, for example) are transferred to the trust. Of course, life and the law aren't as simple as a zip-lock bag, and like everything, revocable trusts have their pros and cons. The cost of a succession is often greater than the cost of managing and distributing comparable assets held in an active trust. If you need a revocable living trust, be sure to deposit your assets in the trust and update the beneficiary designations; otherwise, your trust will not have a value similar to what you spent on it.
Ultimately, having an active trust is important in order to ensure that your assets are managed according to your wishes and that your designated beneficiaries can receive them.