Assets that pass under your will are subject to probate, the court-administered process of distributing a decedent’s assets. In some states, probate can be costly and time-consuming.
To avoid probate, you can move assets into a trust. At your death, assets held in trust go to the trust beneficiaries, as per the terms of the trust.
Trusts can be revocable or irrevocable. For probate avoidance, some people prefer revocable trusts. Reasons include:
* A revocable trust can be rescinded. If you, the trust creator, are not happy with the arrangement, you can bring the assets back into your own name.
* When you create a revocable trust, you generally can be the trustee and the trust beneficiary. Consequently, you’ll control the trust assets and receive any income from those assets.
Besides probate avoidance, you also can protect yourself against possible future incompetency. You can name a successor trustee or co-trustee who will manage the trust assets for your benefit, if you become unable to manage those assets yourself. You should be aware, though, that the benefits of a revocable trust apply only to those assets you transfer from your own name into the trust.
