The initial step to creating a revocable trust is to sign a trust agreement. There are many alternatives to go about this matter, such as writing your own, visiting a local law library, purchasing software to draft you one. Still, most people would concur that it is best to hire an attorney.
The trust agreement would set up a trust for your gain and then outlines how much of your assets are to be distributed when one or both parties pass away. You will have the capacity to amend or rescind the trust at your discretion, and you would remain in absolute control over the trust for as long as you are capable.
Once the arrangement has been endorsed, the following course of action is to redirect all of your assets to the trust. For instance, real estate would be redirected by signing a deed, and brokerage and bank accounts would be rearranged so that the trust is the owner.
Since you may forget to shift a few of your investments into the trust, you would also sign a will, also known as a “pour-over will,” which passes on your estate to the trust upon your passing.
An additional critical point is that you would need to designate the beneficiaries of your retirement plans, life insurance, and other investments so that the profits are directed to the appropriate persons or trusts upon your passing.
Since there are benefits and setbacks to creating a revocable trust, there will be some obligations on your part when considering the weighing of pros and cons.
The benefits of a revocable trust are abundant.
First, you circumvent probate so long as you have redirected everything you possess to the revocable trust. Although probate is typically a simple process in Texas and attorneys do not charge the same expensive prices that lawyers in other states do, your heirs do not have to probate your will, and it will still accumulate some money. They will be able to access your property more speedily when you die.
Second, if you value privacy or are affluent, a revocable trust may be suitable for you. By circumventing probate, no assets catalog and their worth will need to be filed with the court following your passing. An inventory is a public record accessible to any person who asks for a copy.
Third, if the possibility that, one day, you may be incapacitated troubles you, it may be to your benefit to have a revocable trust. You can designate a third party, such as a reliable loved one or perhaps a trust company, to perform as an agent if you are not capable of managing your monetary responsibilities. A revocable trust enables you to bypass a costly guardianship proceeding if your family has to acquire command of your estate.
Fourth, if you possess land outside of Texas, by creating a revocable trust and redirecting your out-of-state land into it, probate can be circumvented in the other state. In numerous states, probate is a complex and very costly process.
Last, it might be more difficult for your successors to contest a revocable trust after your passing. Consequently, if you are thinking of renouncing one of your children or grandchildren, you may have better luck with a revocable trust in place of a will.
Since there won’t be any documents filed at the courthouse, your renounced children or grandchildren may not find out about the trust or your passing until it is inopportune to file a contest. Furthermore, the longer the trust exists, the more laborious it may be for a renounced child or grandchild to challenge it.
With all of this in mind, there are several flaws to a revocable trust.
First, a revocable trust is complex. Wills are typically much more straightforward, and once they are signed, the process is complete. The revocable trust, on the other hand, requires that you need to live the remainder of your life out with it. Whenever you conduct an acquisition of stocks, real estate, or other assets, those estates will need to be transferred into the name of the revocable trust.
Second, setting up a revocable trust is time-consuming. Switching over all your accounts and estates to the name of your revocable trust will take some time. Furthermore, you may experience some issues transferring your accounts to your revocable trust’s name, depending on your brokerage house or bank.
Down the line, if you conclude that a revocable trust is not a practical choice for you, it is time-consuming to rescind it. The revocation process would entail you contacting every brokerage house and bank to switching back ownership of your accounts, change stock ownership, prepare new deeds, and hire an attorney to produce the documents to rescind the trust as well as a new will to substitute the revocable trust agreement.
Unfortunately, your estate will still need to be probated if you forget to switch back even one property that you own to the trust.
Call Us for a Consultation and Set Up a Revocable Trust Today
It’s never too late to start planning your estate. A lawyer can be beneficial with helping you streamline the process and ensuring that you are delighted with the coverage that your estate plan provides you. A Texas estate planning attorney can guarantee that a revocable trust offers the protection you need. Our team of attorneys has over 35 years of experience helping families plan for their futures. We welcome you to call the Voeller Law Firm at (210) 651-3851 to request a consultation and learn more about revocable trusts and estate planning. We are proud to serve the greater San Antonio, Nexar Country, Comal County, Guadalupe County, and South Texas areas.
Our services go far beyond merely preparing – we do our best to help you protect your future.
