Why is a Revocable Trust Important?
You have probably heard of wealthy people getting allowances from trust funds set up by their parents or grandparents, and if that is the only context in which you have heard of them, you might easily get the impression that you will never be able to afford one. In fact, you do not have to be rich to set up a trust. Legally speaking, a trust is a lot like a business entity, and just as businesses come in all sizes, so do trusts. If you have ever owned a small business, you have made decisions about titling assets in the company’s name, and you may have even sought the advice of accountants and lawyers about doing this. Similarly, a St. Petersburg trusts lawyer can help determine whether a trust is right for you.
How a Revocable Trust Works
The person who establishes a trust is called the Grantor. To set up the trust, the Grantor will create a trust document, which lists one or more trustees, people who have the right to make financial transactions on behalf of the trust. Assets are transferred into the trust. Transferring assets into the trust should be done with the assistance of an experienced estate planning attorney. Once the assets are transferred into the trust, it is the trustee that owns and controls those assets. (To continue the metaphor of a business, trustees are analogous to people who have access to the company’s bank accounts or otherwise manage the assets of the business.) You must also list beneficiaries, who are the people who receive money from the trust. Oftentimes, the Grantor is the original Trustee and beneficiary. Accordingly, the person creating the trust is still effectively in control of his or her assets, and those assets are used for the benefit of the Grantor.
You may or may not choose to be a trustee of your own revocable trust, and you may or may not choose to be a beneficiary of it. Whatever you choose, you should also list successor trustees and successor beneficiaries who will take on these roles after the original ones die.
Advantages of a Revocable Trust
The most obvious advantage of a revocable trust is its flexibility; you can keep transferring property to it and amending the list of trustees and beneficiaries for as long as you are alive. It can also be a reliable source of retirement income. From an estate planning perspective, one important aspect of a trust is that its property does not legally belong to you; instead, it belongs to the trustee of the trust. Assets owned by a trustee do not go through probate when the Grantor dies.
Contact Kruse Law Group About Establishing a Revocable Trust
A St. Petersburg trust lawyer can help you establish and fund a revocable trust. Contact Kruse Law Group in St. Petersburg, Florida to set up a consultation.