Revocable trusts, which are sometimes referred to as revocable living trusts, offer many benefits with the primary one being the ability to control your assets during your lifetime. Of course, the other main benefit is the ability to dissolve the trust if and when necessary. There are, of course, other advantages as well as some disadvantages that you should consider.
At the Law Office of James Burns, we review your family circumstances, asset titles and successor arrangements before recommending a plan. Complete the required Risk Exposure Mapping Form before your consultation. Contact our office to confirm the meeting scope and fee. Contact us online or at (949) 305-8642 to confirm the appropriate consultation.
Understanding Revocable Trusts in Orange County, California
A revocable trust is a trust that allows the trustor to change its terms, or even revoke it in full, while the trustor is alive. Once the trustor passes away, the trust is distributed by a trustee according to its terms. It is a way for a person to manage and control their assets while they are living and have those assets pass to their loved ones when they die.
The types of that can be transferred to a trust include but are not limited to:
- Real property (e.g., homes, farms, vacation homes)
- Deposit accounts
- Investments (e.g., stocks, bonds, money market accounts)
- Business interests
- Collectables, art, antiques
- Life insurance policies
Pros of Orange County Revocable Trusts
There are distinct advantages to using a revocable trust as an estate planning tool, including:
Probate Avoidance
The ability to avoid probate is the main reason people consider placing assets in a revocable trust. Probate is the process where a decedent's estate is administered through the court system. It can be a tedious and time-consuming procedure. Assets placed in a revocable trust typically do not have to go through this court-supervised process.
Flexibility
While there are other types of trusts, the revocable trust remains a popular choice due to its flexibility. The creator of the trust is able to make changes to the trust up until the time of their death.
Incapacity Protection
A funded revocable trust can provide for a successor trustee to manage trust assets if the settlor becomes unable to serve, subject to the trust's terms and applicable law. A trust does not replace every power of attorney or health-care directive; authority over assets and decisions outside the trust must be coordinated separately.
Privacy
A revocable trust can reduce the need for public probate filings for funded trust assets. Administration is often handled outside probate, but disputes or other court proceedings can still make information public. Privacy is an objective of planning, not an absolute guarantee.
Cons of Orange County Revocable Trusts
There are some disadvantages to revocable trusts, including:
Time and Money
Going through the process of setting up a revocable trust can take significantly more time and money than simply executing a Will. It requires that the trust be funded by changing deeds, titles, and other documents to transfer into the fund.
Lack of Asset Protection
Some trust types shield assets from the reach of creditors and judgments. A revocable trust, however, does not provide this protection, and assets are still within the reach of creditors.
Terminating a Revocable Trust in Orange County, California
The good news, and the reason most people choose to use a revocable trust, is that the trustor retains the right to terminate it when they choose to do so. The steps you need to take to terminate the trust vary by jurisdiction and the terms of the trust.
Typically, you will need to execute a trust revocation document and “defund” the trust, which means removing the assets placed into it. This may involve re-issuing titles, deeds, and other documents out of the name of the trust.
Contact a Revocable Trust Lawyer in Orange County, California
A properly funded revocable trust can help organize asset management, successor authority and transfers to beneficiaries. It does not, by itself, protect the settlor's assets against creditors or remove them from the taxable estate. We assist with new estate plans and full restatements or revisions that fit the firm's scope. Begin with the required Risk Exposure Mapping Form and the appropriate Situation Readiness Briefing. Contact us online or call (949) 305-8642; the office will confirm whether the meeting is a foundational consultation or a billable advanced-planning meeting.