Learning more about revocable trusts

On Behalf of | Jan 19, 2021 | Trusts

As you age, there are several things that you need to consider. Apart from retirement, you should also consider estate planning. Retirement savings will offer you a dream life at old age, and estate planning will provide you with strategies on dividing your assets to your loved ones. While most people in Illinois think that estate planning is for the rich, they are wrong. It is a procedure that can be done by anyone who has assets. Thus, the main issue is the type of estate planning method that you require. Here’s a guide on revocable trusts.

What are revocable trusts?

Since estate planning is essential, you need to consider trusts. A revocable trust is a legal document that illustrates how your assets will be divided once you die. The main assets include bank accounts, real estate, and other investments. Once you write the trust, you are referred to as the trust maker or grantor whereas the one designated to receive the trust is the beneficiary. The trust is then left in the hands of a trustee when it completed. As a trust maker, you have the rights to edit the contents of a revocable trust.

How to create a revocable trust

If you decide on writing a revocable trust, there are several processes that you need to follow. First, you need to create an inventory of your assets. Second, you should identify the people who should inherit the assets and the best trustee to choose. Until then, you can’t transfer any of your assets to the trust. The process of transferring assets differs. While some assets just require a list, others require the approval of insurance companies, banks, and bank agents.

Revocable vs. irrevocable trusts

The term irrevocable trusts is common when deciding on trusts. Unlike revocable trusts, irrevocable trusts can’t be modified once they are written. Additionally, once you write an irrevocable trust, you transfer ownership to the new beneficiary. Thus, you’ll no longer pay taxes. If you need help with estate planning or with revocable trusts, an attorney may be your best bet for more guidance.