Yardley Estate Planning, LLC
Revocable Trusts
More and more people are turning to the Revocable Trust as the
basic document in their estate plan. As its name implies, a
Revocable Trust can be revoked at any time by the grantor, so
holding property in the trust is very much like owning it
outright. Furthermore, the grantor typically acts as a trustee so
that he or she maintains complete control over the management
of the property placed in the trust.
Generally, the grantor tries to put as much of his or her
property in the Revocable Trust as possible. Therefore, when
the grantor dies, the grantor's property in the trust is disposed
of in accordance with the trust terms, and not in accordance
with the grantor's Will. There is no disadvantage in this because
any instruction that can be set forth in a Will can just as easily
go in the Revocable Trust.
Why do people do this? The main reason is to avoid the court
proceedings, costs and hassles associated with the "probate" of
a Will and the administration of probate property that passes
under a Will. By contrast, the property held in a Revocable
Trust after the grantor's death can typically be administered
without any court oversight or associated costs.
Of course, sometimes it is difficult to transfer everything that
one owns to a Revocable Trust. As a result, grantors with
Revocable Trusts should also execute a simple Will directing
that any property owned by the grantor at death be transferred
to the Revocable Trust. This would be a “pour-over” will.
Another benefit of a Revocable Trust is the flexibility it can
provide if the grantor should become disabled, incapacitated or
incompetent. The trustees, who have been selected by the
grantor, will typically have the ability to manage and administer
the grantor's property held in the Revocable Trust with greater
flexibility than is provided by other methods of managing an
incompetent's property, such as guardianship, conservatorship,
or under a durable power of attorney.
A major misconception about Revocable Trusts is that they can
save on Estate Taxes. This is simply not true, as the assets of a
Revocable Trust are treated for Estate Tax purposes just as if
they were owned outright by the grantor.
More and more people are turning to the Revocable Trust as the
basic document in their estate plan. As its name implies, a
Revocable Trust can be revoked at any time by the grantor, so
holding property in the trust is very much like owning it
outright. Furthermore, the grantor typically acts as a trustee so
that he or she maintains complete control over the management
of the property placed in the trust.
Generally, the grantor tries to put as much of his or her
property in the Revocable Trust as possible. Therefore, when
the grantor dies, the grantor's property in the trust is disposed
of in accordance with the trust terms, and not in accordance
with the grantor's Will. There is no disadvantage in this because
any instruction that can be set forth in a Will can just as easily
go in the Revocable Trust.
Why do people do this? The main reason is to avoid the court
proceedings, costs and hassles associated with the "probate" of
a Will and the administration of probate property that passes
under a Will. By contrast, the property held in a Revocable
Trust after the grantor's death can typically be administered
without any court oversight or associated costs.
Of course, sometimes it is difficult to transfer everything that
one owns to a Revocable Trust. As a result, grantors with
Revocable Trusts should also execute a simple Will directing
that any property owned by the grantor at death be transferred
to the Revocable Trust. This would be a “pour-over” will.
Another benefit of a Revocable Trust is the flexibility it can
provide if the grantor should become disabled, incapacitated or
incompetent. The trustees, who have been selected by the
grantor, will typically have the ability to manage and administer
the grantor's property held in the Revocable Trust with greater
flexibility than is provided by other methods of managing an
incompetent's property, such as guardianship, conservatorship,
or under a durable power of attorney.
A major misconception about Revocable Trusts is that they can
save on Estate Taxes. This is simply not true, as the assets of a
Revocable Trust are treated for Estate Tax purposes just as if
they were owned outright by the grantor.
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| Yardley Estate Planning, LLC 41 University Drive, Suite 400 Newtown, PA 18940 Phone (267) 573-1019 Toll free (877) 251-4393 Fax (267) 604-9164 mgarry@yardleyestate.net www.yardleyestate.net |
