What are the benefits of a revocable trust, or as many people refer to it, a living trust? While the property you leave in a revocable trust still has estate and inheritance tax exposure, it can help to minimize the time and costs associated with the probate process. The avoidance of probate is the most widely understood benefit of the revocable trust, but there are additional less understood benefits.
Many individuals value confidentiality and would prefer that the assets they leave, and to whom they leave them, remain private. When your will is filed with the probate court after you die, it becomes a matter of public record. In contract, the revocable trust, is never filed with any entity and remains private.
The revocable trust can also serve as a conservatorship for incapacity. Oftentimes, when a person due to physical or mental limitations or old age is unable to make financial decisions, their family may petition the Probate and Family Court to appoint a conservator in order to handle any financially related needs of the incapacitated party. If a revocable trust is in place with you as trustee and a named successor trustee upon incapacity, the need for that petition is obviated and the successor trustee can take over the decisions.
In the case of minor children, there are limitations on the amount of property they a minor beneficiary can control prior to becoming legally recognized as an adult (age 18). Additionally, many families feel strongly that despite the ability for an 18 year to inherit property, the burden or responsibility associated with inheritance at such a young age is not ideal. The family would prefer some oversight regarding the manner in which the property is used and concerned that an 18 is not equipped to make those responsible decisions. If properly drafted, a revocable trust can name a successor trustee to maintain the property for the minor until they reach a designated age. If the minor beneficiary is under the age of 18, this would insure that any property encompassed within the revocable will would not require a conservator be appointed by the court to maintain the property of the minor under he/she reaches the age of majority.
With a revocable trust, you can maintain control over the disposition of your assets or change your mind at any time. The trust corpus (or assets) are limited to those that are transferred to the trust. If a particular asset it earmarked for the trust, in that the trust is listed as the beneficiary, that designation can be changed at any time. Property, transferred into the trust, can be deeded out of the trust at any time. The successor trustee can be changed. Any property inside the trust can be sold or given away. In total, prior to your death, you have complete control over the trust.