4 Common Misconceptions About Revocable Trusts

In this article, you can discover…

• Helpful facts about revocable trusts.
• Missteps to avoid when writing a will.
• How an attorney’s help can make the estate planning process simpler.

What Are The 4 Common Misconceptions About Revocable Trusts?

• Many people assume that revocable trusts are only for the very rich. This simply isn’t true. Revocable trusts are legal tools that help you decide how your assets should be distributed after your death. They’re for people of all backgrounds and walks of life.
• Another misconception is that revocable trusts eliminate taxes. While revocable trusts can reduce taxes if they’re set up correctly, they cannot entirely eliminate taxes on the amount held in trust.
• Many people mistakenly believe that trustees are restricted in how they can use assets. However, in a revocable trust, the trustee can use those assets in the same ways that they would use any other assets that are not held in trust.
• Finally, many clients believe that revocable trusts are only worthwhile if they have many beneficiaries. This is simply not true. Even if you have only one beneficiary, trusts can be helpful ways to tailor or postpone distribution. For example, you may wish to postpone releasing wealth to a child until they are old enough to handle assets responsibly, such as at age 25 or 30.

What Are Four Important Estate Planning Steps For Newlyweds?

• As newlyweds, both of you should have a durable power of attorney plan in place that appoints the other spouse as an agent. This allows either of you to handle finances should the other party be incapacitated by illness, age, an accident, or other emergencies.
• You should both have healthcare directives filed with your doctor, detailing what types of medical care (such as CPR) each of you would like to receive should you be unable to communicate.
• Both should also have a will or trust in place so that your assets can be distributed according to your express wishes and values. Assets can be left to future children, family, friends, or even a charity.
• If either of you bring separate assets into the marriage, you’ll need to discuss how these assets should be treated. This could be done through post-nuptial agreements, prenuptial agreements, or a simple document between the both of you as to how these assets will be handled.

What Are Three Missteps You Should Avoid When Writing A Will?

• First, when writing a will, never let a beneficiary serve as a witness or notary to the will. Doing this automatically voids the document.
• It’s also important to keep in mind that you don’t need to specifically name someone who is to be left out of a will. For example, you don’t need to include the words “I leave my daughter out of this will.” That is an unnecessary step that could cause conflict or confusion in the future. It’s best to simply not mention them, and focus instead on the people to whom you have left your assets.
• Finally, when mentioning financial assets, it’s better to generalize than to be specific. There’s no need to specify a bank account number at a specific bank or an investment with a specific investment company. Instead, it’s best to make statements like “All of my investments go to so-and-so.” This allows flexibility should your investments change over time.

What Are The 5 Simple Steps That Can Begin My Estate Planning Journey?

• The first step to take is to discuss your present needs and future goals with a spouse, your parents, or another significant person whom you trust.
• Begin to make a list of your assets so that you can know what these assets are at present. This includes cars, money held in bank accounts, and personal household possessions.
• Get in touch with an estate planning attorney and decide together if a will or a trust would be best for your assets and future plans.
• Talk with a financial advisor to get their recommendations for your investments and other assets in light of estate planning.
• Finally, an estate planning attorney can help you prepare your durable power of attorney, health care directives, and your will or trust.

What Are Five Common Mistakes That People Make When They Try To “Do It Yourself” With A Will?

• The first thing that many people don’t realize is that two impartial witnesses are needed to sign on the will for it to be valid. Many people skip this step entirely when they write up their own will.
• You will also need a notary public to notarize the signees’ signatures and the witnesses’ signatures. A DIY will is likely to skip this crucial step.
• A proper will should be typed out rather than handwritten, as handwriting can be easily misread or misinterpreted.
• It’s important to note that a beneficiary can not serve as a witness or a notary to a will. These roles must be fulfilled by a third party.
• After you execute a will, do not write anything else on the document. This will immediately void the will. If you need to make revisions or corrections, have a new will prepared and typed up.

What Are The Five Signs That Someone Needs To Hire An Estate Planning Attorney?

• If you are married and have children, get in touch with an attorney to help plan your estate and make sure your family understands your wishes for your assets. This can also help ensure your spouse and children are taken care of after you pass away.
• If you are interested in leaving your assets to a person or a cause, reach out to an estate planning lawyer. A lawyer can also help you draw up a trust to distribute assets to your children over time, either at certain ages or when certain milestones are met.
• If you are considering divorce, an attorney can help you ensure that your future is more secure following the divorce. They can also help you adjust your will and list of beneficiaries in light of the end of a marriage.
• If you own land and would like that land to pass to beneficiaries without going through probate, an estate planning attorney can help you set up a trust to accomplish this.
• If you are in a blended marriage, let an estate planning lawyer help you establish a trust to separate each spouse’s wishes for their respective children.

Top 6 Reasons You Should Have A Trust In Place Of A Will

• Trusts help you avoid probate. As long as you have set up and funded the trust, the assets held in the trust will not have to go through the probate process.
• When you pass away and have a will, creditors are notified of probate and may seek your assets to help pay off debts. With a trust, however, creditors are not notified, keeping assets within the trust safe from debt collectors.
• A will releases all of your assets immediately. A trust, however, allows you to distribute assets over time. For example, you can use a trust to distribute some assets when a child turns 18 and further assets when they turn 30.
• When a married couple creates a family trust, the trust continues even after one spouse passes away. The surviving spouse can simply keep the trust going throughout their life without having assets released prematurely or caught up in probate.
• A trust is a private document that is not filed in court. Your assets and your wishes for your assets are not made public at any time with a trust. This helps ensure privacy, discretion, and control over who knows the details of your estate plans.
• Trusts also provide greater and more specific protections for the children of each parent in a blended family. This helps protect each child’s interests and each parent’s estate wishes for their respective children.

Still Have Questions? Ready To Get Started? For more information on Revocable Trusts, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 271-7940 today.