When making an estate plan, you may think wills are the only tools. However, trusts are another option for estate planning, regardless of your income level. Revocable trusts in Vancouver, Washington, are something to consider and come with several benefits.
Overview of revocable trusts
A revocable trust is an estate planning tool that helps you manage your assets the way you want. You are the grantor, or creator, beneficiaries receive the assets, and a trustee oversees the trust.
It is often called a living trust because it remains in effect until your death and then assets transfer. There are many assets you can place in the trust, which include business interests, stocks, bonds, and homes, even with a mortgage. However, you cannot place certain assets in revocable trusts, such as life insurance, health savings accounts, and motor vehicles.
When revocable trusts are beneficial
One major benefit of a revocable trust is you can alter or sell the contents at any time without permission from the beneficiary. If you have assets out-of-state, consider using a revocable trust to register deeds and avoid ancillary probate, which involves probate for out-of-state assets. If you are concerned about records of asset transfers becoming public, a trust will help keep them private.
You can instruct the trustee to manage the assets for them until they reach legal age or any age you prefer. If you feel the beneficiary will not manage money wisely, you may have it allocated in allowances.
Using a revocable trust is a great way to control assets and help avoid probate regardless of income level. However, revocable trusts come with some drawbacks, such as taxes, since you still own the property. Consider the pros and cons and how they play into your situation before creating one.