A Revocable Trust is a legal document that is most often used to replace a Last Will & Testament for transferring property when someone passes away. A Revocable Trust can be used by anyone who wants to avoid the Probate Court process for property that they own. Property can include real estate, mobile homes, bank accounts, cars, business interests, and many other types of assets.
There are three groups of people involved in a Revocable Trust.
The first group is made up of the Grantors, these are the people who created the Trust. Grantors are the ones who decide what the terms of the Trust are going to be, they have the power to change the terms of the Trust at any time during their lifetime, they decide who the Trustees are going to be, who the Beneficiaries are going to be, and how property will be distributed, among other things. The Grantor has special rights, they have the right to add what they want to the Trust, to take property out of Trust, to use the property however they wish, and are still considered the owners of the property in the Trust. For the Grantor, a Trust does not change their life or how they handle their property.
The second group are the Trustees, or the managers of the Trust. It is the Trustee’s job to make sure that the property in the Trust are being taken care of and to follow the terms of the Trust. In a Revocable Trust this is usually the Grantor first, and then the Grantor chooses who will serve as Trustee after the Grantor cannot serve any longer. The Trustees can be family, friends, trust companies, or anyone else that the Grantor trusts to safeguard the property and follow the terms of the Trust.
The last group are the Beneficiaries, or the people who get some benefit from the Trust. Initially, the Primary Beneficiary is the Grantor, but the Grantor names the Beneficiaries who are to receive the property after the Grantor passes away. The Grantor decides who is going to be a Beneficiary, how much of the property they are going to receive, and when they are going to receive the property.
There are many benefits to creating a Revocable Trust. Revocable Trusts allow immediate access to the property when the Grantor passes away so that funeral arrangements can be made, so that mortgages and bills can be paid, and to ensure that the property and beneficiaries are protected from the property decreasing in value or being lost. Revocable Trusts avoid Probate Court so that the property and beneficiaries’ information remains private. Revocable Trusts allow the Grantor to spread payments out over time to ensure that beneficiaries who have a difficult time managing money do not have large sums given to them at once. Revocable Trusts can allow the Grantor to specify that beneficiaries can only use the property for specific purposes, like college educations. Revocable Trusts can control how property are spent for beneficiaries who are under eighteen (18) years old and safeguard property for disabled beneficiaries.
There are tremendous benefits to using a Revocable Trust, for more information or to schedule an appointment to discuss your options, contact us at 603-628-1900 or via email through our contact us page.