A living trust, one that can be molded as needed, is also known as a revocable trust. Created while you are living and alive as long as you are, a revocable trust can be changed or revoked at any time during the life of the individual who created the trust (also known as the “grantor”). Revocable trusts are often created by estate planning lawyers in Springfield MO to avoid the costly, lengthy, and frustrating probate process. But do their pros outweigh their cons? Let’s dive in and find out.
The Pros of Revocable Trusts
- Revocable trusts help you avoid probate.
- If you own property in more than one state, you may be able to avoid probate proceedings in each state (which are also called ancillary probate).
- Revocable trusts give you privacy because while probate proceedings are a public record, living trusts are private. If you don’t want certain people to know who you’ve chosen to be your beneficiaries, a revocable trust can help you hide your choices.
The Cons of Revocable Trusts
- The property in the trust remains the property of the grantor, so you won’t be able to avoid estate taxes.
- The grantor still must pay taxes on income gained through the property.
- The grantor will have to pay a lawyer to create the trust. Sometimes these fees can add up to thousands of dollars. There are also administrative and recording costs.
- The assets in the trust are not protected against creditors.
- The grantor will still need to create a will. Most people who create revocable trusts still have other assets to manage or have children involved, and both of these scenarios require a will that clearly states the grantor’s intentions.
So should you create a revocable trust? That is entirely up to you. If you’re hoping to avoid probate and gain some privacy, hire lawyers in Springfield MO and go for it. However, do realize that revocable trusts aren’t a perfect solution for all of your concerns. You will still have to pay taxes and create a will, and your assets aren’t protected against creditors. If you’re considering revocable trusts, contact a lawyer or financial advisor to learn more about them before you make a firm decision.