If you have no experience with estate planning, you might not be familiar with a revocable trust. A trust is a tool that allows you to convey money and assets to other parties or even yourself. A revocable trust is a common trust that people use and it may have benefits for you in certain situations.
With a revocable trust, you can set up the trust and later dissolve it whenever you wish. You can even make yourself the trustee. As The Motley Fool explains, there are certain situations when a revocable trust can really come through for you.
When you become incapacitated
If you experience a serious auto accident or injury, you may suffer incapacitation and can no longer manage your financial affairs. If you have named a successor trustee, you do not have to lose control of your finances. Your successor trustee will take over in your stead, managing responsibilities like paying your medical costs as well as your ordinary bills and expenses. If you recover, you can take over as trustee again.
After your death
A will can provide an inheritance for your heirs after you die, but a trust can do the same. You just have to set up the trust so it continues to operate following your death. You must make sure you have a successor trustee that will administer the trust according to your wishes.
There are many ways you can use your trust. You may gift the remaining trust assets to your children. If your children are still minors, you can set up provisions for your children to pay for their shelter, schooling and other needs until they are adults and can handle their own finances. Another option is to give your favorite charities money from your trust.
In general, a revocable trust allows you to avoid probate. If you want to spare your family time in probate court and enhance the privacy of your estate after your death, a revocable trust may be beneficial in this respect. Make sure you transfer property to the trust so that your trust actually has the property or assets you want it to have so it can pass them on to beneficiaries.