Revocable Trusts in an Estate Plan: How Can it Benefit Your Family?

Many of my clients who have a general understanding of the necessity of trust, do not however know that there are many kinds of trusts each with their own special purpose and each used as part of your estate plan in conjunction with your overall goals and concerns. Some are very specialized. For example the Special Needs Trust enables a trustee to provide financial assistance to a beneficiary without jeopardizing any monies received from the government as a result of a disability.

The two most basic categories of trusts are revocable and irrevocable. All trusts regardless of their purpose will fall into either of these categories.

A revocable trust provides the grantor of the trust myriad benefits.

In 2011 the estate tax is set to return. From that time on a tax will be levied, a 55% tax will be levied on every dollar beyond the first million. Now while $1 million may sound like a lot of money to most people, it really isn't, in fact it can be quite small when you consider that it includes not only direct cash, but the value of your home, your stocks, bonds, bank accounts, retirement accounts, jewelry, paintings, and your life insurance - plus anything else that you may have titled in your name at the time of your death. Without planning, it is possible that the estate tax can bankrupt a family.

Through the use of a revocable trust, utilizing it as the centerpiece of a foundational estate plan, your attorney will be able to double the federal estate tax coupon amount, from the designated $1 million-$2 million. This will save your beneficiaries $550,000.

In addition to shielding you from the estate tax, a revocable trust will, by its very nature enable your estate to avoid probate completely. Probate is the process of assessing and gathering all of a person's assets, including houses and cars life insurance, bank accounts, retirement accounts, and anything else titled in the name of the deceased.

It is a common misconception that creating a will will help to avoid probate, but probate will be required will or no will.

Probate is not only very expensive, generally costing your estate between 4% and 7% of your estate's total value, but it can tie up the distribution of your assets for between six months to a year and a half, even without any challenges.

Additionally probate renders your estate visible to the public. All of your personal information and the details of all the people who are contesting your will are laid bare for the world to see. Trusts will keep your private information private. The personal details of your life will remain invisible to all but your trustee. Probate on the other hand is a public record. You must file your will with the clerk of courts and it becomes accessible, visible, readable to anyone with a computer. The family infighting over the proceeds of your will are also made public for the world to see. The great baseball player Ted Williams did not have a trust and today, after his death all the world knows that his head is cryogenically frozen.

Another benefit, not to be overlooked for using a revocable trust is that it provides an ability for you to control your assets from the grave. It provides a means whereby you can control your estate's distribution long after your death. In Florida you can control your assets for as many as 360 years after your death.

A revocable trust allows you to limit access to your assets based on what ever criteria you determine, whether it be age, a tendency to make bad financial decisions or to be certain that the distribution of your estate does not negatively impact any financial aid scheduled to be granted by the government for special needs or disabilities. Through a revocable trust you can and not only provide for your beneficiaries, but to a great degree control their possible misuse or squandering of your assets.

An additional benefit, not to be overlooked, or minimized is that a revocable trust, by its very nature, provides asset protection for your beneficiaries. When you leave a will only, you leave your estate directly to your beneficiaries, who accept it with no protection. Creditors, lawsuits, divorce, illness and accidents can all steal your dreams of passing your life long him and him and him assets on to your beneficiaries When your estate is distrubuted though a revocable trust, your beneficiaries will be protected from all preditors and receive the assets in trust.

For anyone who's assets exceed $75,000 a revocable trust is an absolute necessity and should be an integral part of your estate plan.

Trusts are complicated and should only be created under the guidance of an estate planning legal professional. Mistakes can cost your beneficiaries a great deal, so consult an [url=http://wfplaw.com]estate planning[/url] and asset protection attorney. In South Florida contact the law firm of Wild Felice and Pardo (954)944-2855 or via email at info@wfplaw.com to schedule your free consultation