There are many reasons why a Bay Area resident might decide to set up a revocable trust as part of their estate plan.
To review, a Californian may set up a revocable trust while they are still alive. They then can move all or part of their wealth into the trust by formally transferring it out of their named account and into the name of the trust.
Although they can name themselves the trustee of their own trust and continue to manage their wealth, they do not have to.
What makes the trust revocable is that they can end it at any time and reclaim their property in their individual name for so long as they can make such decisions.
If the creators of the trust die, a well-drafted trust will explain what will happen to the trust property. For example, it may be distributed to loved ones, or a successor trustee may step in to manage the property.
Revocable trusts may not offer as many tax incentives as other types of trusts. However, they do offer some important benefits:
- They offer a measure of privacy since they ordinarily don’t become public.
- Property in a revocable trust does not have to go through the probate court. Assuming there are no legal disputes or problems, the trust will just continue to work after the creators of it die.
- Trusts can also offer more flexibility to deal with a more complicated family situation. Sometimes, it just does not make sense to use a will to divide up assets right after one’s own death. Complicated family situations are more common than one might think.
There is no one-size-fits-all to estate planning
Revocable trusts may be the right fit for some Fremont residents but might be unnecessary or even harmful to others.
It is important to remember that when it comes to estate planning, there are no one-size-fits-all solutions. What is a good estate plan depends a lot on a person’s financial and personal situation.
A person should make sure they understand all of their estate planning options before committing to one.
