A trust is an arrangement in which you provide for someone to administer and invest assets for the benefit of your beneficiaries. In a revocable trust, you maintain control during your lifetime and can amend or revoke the trust at any time.
A revocable trust would act like a will when you die. It has the following advantages over a will:
• Assets titled in the name of the revocable trust are not subject to the probate process upon death, saving time and money.
• A revocable trust is like a power of attorney to allow for the management of the trust’s assets upon the grantor’s incapacity.
• A revocable trust is a private way to manage one’s affairs and to dispense of one’s assets. Unlike a will, a revocable trust does not become a part of the public court record.
• A revocable trust is more difficult to contest than a will.
• Having assets in a revocable trust does not necessarily minimize or avoid estate taxes.
• A revocable trust is not necessarily appropriate for someone with a small (or a simple) estate. A will may be more appropriate as probate should not be a concern.
Even if you have a revocable trust, you still need a will. A so-called “pour-over will” is used to make tax elections, appoint a personal representative, appoint a guardian for minor children, and transfer assets to the trust that were not titled in the name of the trust.