Understanding Revocable Trusts in Estate Planning

A revocable trust is a type of living trust that you set up while you are still alive to hold and manage your assets. You are in charge and can update or cancel it whenever you want.

When you need legal help with estate planning, where you live is important. St. Louis is a major city in Missouri that is situated along the Mississippi River. The Gateway Arch and a powerful regional court system that handles probate cases are two things that make it famous.

If you want to be sure your trust follows Missouri law and represents your wishes, you should talk to a St. Louis revocable living trust attorney when you plan your estate. This article will help you learn about revocable trusts and how to use them in estate planning.

What is a Revocable Living Trust?

A revocable living trust is a legal agreement you create while you are still alive. You put assets into the trust, but you still control them. 

You are the grantor, and while you are still living, you are both the trustee and the beneficiary. A successor trustee takes over after you die, and the trust is then set in stone.

How Does a Revocable Trust Work?

A revocable trust holds the title to your assets. These assets could include homes, bank accounts, or investments. You have to “fund” the trust, and that means changing the names of the assets to the trust’s name.

Your successor trustee will take care of your assets if you are sick or disabled. This keeps the courts from being involved in a lot of cases.

With trusts, property can be handled for beneficiaries according to clear legal norms. Proper drafting ensures that the trust meets state requirements.

Why Do People Use Revocable Trusts?

A lot of families use revocable trusts to avoid probate. It can take months to go through probate, and the court oversees the process.

Usually, the beneficiaries of a revocable trust get the assets right away. This can help you save time and keep details private. Privacy is important because wills become public record during probate, but most of the time, trust documents don’t.

Revocable trusts can be a good tool for incapacity planning. If you become incapacitated, a successor trustee can take over the management of your assets and finances without the need for a guardianship proceeding.

There are tools available for estate planning that help ensure the safety of your loved ones and how your asset will be distributed. If set up properly, your trust can help you achieve those objectives.

What are the Limitations?

Creditors can still take assets from revocable trusts. They may still be able to get to the assets since you control them. They also don’t reduce estate taxes because the assets are still part of your taxable estate.

There are setup costs involved, and you also need to review the trust over time. A lot of people still require a “pour-over will.” This takes into account assets that weren’t put into the trust.

Key Takeaways

• A revocable trust is created during your lifetime and can be changed.
• You are in control of the assets while you are alive and can name a successor trustee.
• It keeps your information private and helps you avoid probate.
• It doesn’t keep creditors or estate taxes away.
• Proper funding is required for it to work.
• A lot of people still use a pour-over will with the trust.
• Regular reviews make sure the trust stays in line with what you want.