When creating an estate plan, there are a few ways to bequeath assets to beneficiaries. The simplest way is through a will, but taking the extra step to set up a revocable living trust has its advantages. This arrangement also has a few drawbacks though, so if you’re thinking about including one in your estate plan, it’s essential to research its terms thoroughly before doing so. Here are some facts about revocable living trusts to get you started. 

Pros

When you create a revocable legal trust, you can name yourself as the trustee and thereby manage the assets it contains. As both the grantor and trustee, you will maintain control over the property while still alive. You may also modify the terms of the arrangement at any time. This provides a considerable amount of flexibility and is ideal for those whose financial situation is likely to change in the coming years. 

Once the grantor of a revocable trust dies, the successor whom they named will step in and distribute the assets according to the arrangement’s terms. These assets will not have to pass through probate before being distributed, allowing beneficiaries to maintain some privacy. 

Cons

The two main reasons people decide not to include revocable trusts in their estate plans are the expense and the hassle. Creating a trust is more complicated than creating a will, so it can cost more in legal fees. There may also be costs and various filing fees associated with registering property to the trust. Additionally, transferring assets can be complicated and time-consuming. But if you hire a seasoned attorney, they can streamline the proceedings and facilitate the transfers every step of the way. 

Another major reason to think twice before setting up a revocable trust is that its terms will not change just because your situation does. Unlike a will, which may change automatically upon marriage, divorce, or the birth of a child, a trust remains in effect unless the grantor modifies the terms. Therefore, if you do set up a trust, it’s essential to review it periodically and ensure its terms are still in your loved ones’ best interests. 

The estate planning team at Wills and Trusts Hawaii will help you draft a will and set up revocable living trusts. Located in Honolulu, this firm has more than 30 years of experience assisting clients in preparing for all eventualities. To schedule a free consultation, fill out the form on their website or call (808) 792-8777.