When planning their estates, many individuals choose to utilize revocable trusts. A revocable trust is a separate legal entity that is controlled by its grantor until the grantor's death. He or she can put money in the trust and take money out whenever he or she pleases. And, during the grantor's lifetime, the revocable trust is transparent, i.e. ignored, for income tax purposes. But, after death, any remaining money will be legally transferred to his or her beneficiaries on the terms and conditions, and at the time specified in the trust by the grantor.
Are you interested in opening a revocable trust in Morton Grove, Illinois? Need help deciding whether or not it's the right choice for you? If so, you're reading the right article.
Here are the advantages and disadvantages of revocable trusts.
While revocable trusts might not be perfect, they are advantageous in a number of different ways. Let's discuss the advantages and benefits of revocable trusts below.
Stay Away from Probate
One of the primary advantages of utilizing revocable trusts is that they allow you to avoid probate. By avoiding probate, you are afforded a number of benefits. Not only will less money be taken by the state and the probate costs to attorneys and others administering a probate estate, but your estate will be legally transferred to your beneficiaries in a much timelier manner. And, unless your heirs invite it by filing a lawsuit, the court system will stay out of what is truly family business.
In most cases, the assets of a revocable trust are transferred to its beneficiaries shortly after death, and far sooner than they would be through probate. On the other hand, when your will goes through probate, it can take your beneficiaries months or years to receive your assets.
Keep Your Estate Private
Do you want to keep your estate out of the public eye? If so, it's wise to utilize a revocable trust. The details contained within revocable trusts are available only to those who have an investment in those specific trusts.
In contrast, when an estate goes through probate court, the details are available to anyone and everyone who is curious about them. All they have to do is look in the court file. If you have a large estate with valuable assets, this can be a troubling prospect. Virtually every famous person has personal details of his or her will published in the newspaper shortly after it is filed.
Name a Successor Trustee
Should you become incapacitated, someone will likely have to manage your estate for your remaining life. If you want that person to be designated specifically by you, and to do it without the court system and the related expense, it's wise to create a revocable trust.
A revocable trust allows you to name a successor trustee, allowing that person to take responsibility for your trust immediately after you become unable to do so yourself. This keeps the courts out of the decision, offering you optimal control.
Though revocable trusts offer a number of positives, they are not without their disadvantages. Let's discuss those disadvantages below.
Initial Costs Can Be High, but cheaper that a Probate, Guardianship or Illinois Land Trust
Perhaps the primary downside of revocable trusts is that they can be expensive in the short term. In order to fund and update your trust, you will likely have to pay a one-time fee to set up your trust. Depending on the specific financial situation, this can sometimes be a challenge.
If, however, you have enough money to establish your trust, and then update your trust on a consistent basis, it's a wise decision to open one. The costs saved by avoiding probate court will make updating and maintenance fees a moot point. And some folks use Illinois land trusts, which have annual fees. A private trust does not, so overtime, if you now have a land trust, switching to a private trust will save you money in the long run.
Require Regular Maintenance
As noted above, when you have a revocable trust, it's best to maintain and update it on a regular basis. It is your responsibility to transfer your assets to the trust after you have obtained them. And, it's a good idea to review the terms of your trust every 5 to 7 years to make sure it still does what you would want in the circumstances. But, once you fund your trust, the ongoing maintenance is minimal.
Interested in Creating a Revocable Trust in Morton Grove?
Have you decided? Are you interested in creating a revocable trust in Morton Grove? If so, the experts here at John J. Pembroke & Associates are the people to see.
Serving the Morton Grove area for over 30 years, we have helped a range of clients to open and manage revocable trusts. It would be our great honor to help you as well.
Contact us today to get started!