A revocable trust offers the grantor a number of incredible benefits and opportunities. In 2011, the estate tax will increase to 55 percent on everything over the first million dollars. A million dollars may sound like a large amount of money, but it is actually quite small when you consider that it includes life insurance proceeds, home equity, stocks, bank accounts, retirement accounts, jewelry, paintings, and any anything else you want. it may have had a title in his name at the time of his death. This tax has families bankrupt.
By using a revocable trust as the centerpiece of a founding estate plan, we can double the federal estate tax coupon amount from $1 million to $2 million, thus saving your beneficiaries $550,000.
Beyond estate tax protection, distributing assets through a revocable trust will prevent probate altogether. Probate is the process of bringing together all assets that are titled in the sole name of the deceased. These assets can include houses, cars, bank accounts, and even life insurance policies or retirement funds. Many people believe that having a will prevents probate, but probate will be necessary whether or not the decedent left a will.
Probate to an estate will typically cost between four and seven percent of the value of the entire estate and can tie up your assets for six to eighteen months, without any dispute or challenge. In addition, the probate process is made public and airs your family’s dirty laundry for your entire community to see.
A third benefit of using a revocable trust is the ability to control your assets long after you are gone. In Florida, a person can retain control of his estate for up to 360 years after his death. We typically write trusts to control assets until the grandchildren reach a certain age or achieve a certain goal. The limitation of access is not always decided by the age of the beneficiaries. Sometimes it is necessary to protect a child from their own bad financial tendencies. Sometimes it is necessary to make accommodations for a child receiving financial assistance from the government by creating a special needs trust. For any and all considerations and concerns, a revocable trust will allow her to distribute her assets in a way that best suits her life and the people she loves.
Another benefit of using a revocable trust is the automatic asset protection it can provide to your beneficiaries. When your assets are distributed through a will, the beneficiaries accept the assets directly without protection. A bad divorce, car accident, lawsuit, or even existing creditors can take those assets from your beneficiaries. However, when you distribute your property through a revocable trust, your beneficiaries will receive the property in trust. They will have as much access to the assets as you want to give them, but those assets will be protected from creditors, litigation, divorce, or any other financial threats your beneficiaries may face.
There are an endless number of reasons to make a revocable trust the centerpiece of your comprehensive estate plan. If you have more than $75,000 in assets, a revocable trust is a virtual necessity. For more information on revocable trusts, contact your South Florida estate planning and asset protection attorneys. Trusts are very complex documents and should never be attempted without the guidance of a legal professional who specializes in such matters.