Revocable trusts, also called living trusts, are a popular estate planning
tool many people use to transfer assets to their heirs. The trust allows you to manage your assets while you’re alive and then have them automatically transferred to your beneficiaries when you die or become incapacitated. In this post, we will discuss how revocable trusts work and who they’re for.
What is a Revocable Trust?
The terms of a revocable trust can be modified or canceled based on the wishes of the originator (grantor) of the trust. While the trust is enforced, income earned is dispersed to the grantor. Property is transferred to the trust’s beneficiaries only after the grantor’s death.
How Does a Revocable Trust Work?
A revocable trust protects the grantor’s assets from the time it is established. The terms can be adjusted or revoked at any time by the grantor. A trustee may be appointed as administrator over the trust’s assets and property. When the grantor dies, the trust becomes irrevocable. The trustee is then responsible for dispersing the assets to the intended beneficiaries.
Who Should Consider a Revocable Trust?
If you have many assets or if your estate is likely to be subject to estate taxes, you should consider having a revocable trust. Anyone who has valuable property he or she would like to pass on from one generation to the next without going through probate might want a revocable trust.
Again, the grantor maintains the ability to make adjustments to the terms of the trust. This may be helpful for anyone who wants flexibility due to changes, for instance, in family arrangements, etc.
A revocable trust goes into effect immediately once the paperwork is signed, the trust is funded, and the assets are placed in trust. This is in contrast to a will, which goes into effect only after death. So, anyone who would like to ensure that their affairs would be handled in the event of incapacitation should consider a revocable trust.
Contact an Estate Planning Lawyer to Learn More About Revocable Trusts
If you have questions about revocable trusts, how they work, or why to use them, contact Tarta Law
. We can help answer any questions about what types of trusts are best suited for your circumstances. Contact us today at 201-444-8448
for a consultation. Tarta Law serves the New Jersey Communities of Midland Park, Ridgewood, Glen Rock, Wyckoff, and Franklin Lakes.