What Is The Purpose Of A Trust?
The purpose of a trust is to avoid probate. The main purpose is to hold your house in a drawer, avoid probate, and save your heirs a lot of money.
What Should Be Included In A Revocable Trust?
Your house should definitely be included in a revocable trust. You don’t necessarily need to put your cars in a revocable trust because we tend to change cars often. In a trust package in the estate funding package, you get a trust pour-over will because it’s for financial power of attorney, and then you get your health care directive. The pour-over will pours anything you left out and makes those assets or property part of the trust, it can be anything less than $160,000. If you buy a beautiful quarter million-dollar motor home, then definitely title it to a trust. You want assets that are high-dollar value to be titled to the trust as if the trust owns it now. You’re the trust toward creating your trust. You’re the trustee managing all of your assets during your life, and you’re the beneficiary of everything during your life.
There’s a lot of people that think if they sell something to the trust that they don’t have it anymore, and that’s completely wrong because if you’re the beneficiary, the trustee, and the trust, you own it. It is just a different way of titling it.
Are There Any Disadvantages Of A Revocable Trust?
There aren’t any disadvantages of having a revocable trust.
Are There Any Assets That Should Not Be Put Into A Revocable Trust?
It’s not about the type of assets that should not be included in a revocable trust. It’s just that you can keep them out, and because its beneficiary driven, you can give those funds to other people so that they’re not named in the trust. Some people want to keep it simple, and maybe sometimes they want that money to be earmarked. I have several clients that have earmarked different funds to different people, and so, if you keep it under the trust, then the trustee is not having to manage it as much.
What Are The Steps Of Administrating A Revocable Trust After Someone Has Passed Away?
Administering a revocable trust after someone has passed away is very similar to doing an administration in a probate where you gather all of the assets and list them all. You get to know who the beneficiaries are in a trust. You have to send out a copy of the trust to every one of the beneficiaries, so they know because it’s always transparent. You’re not supposed to hide the ball, you are always supposed to let people know. You can then get them to sign a waiver and a notice of acknowledgement indicating that they received a copy. It is processing all the wishes, and then you just distribute it all. Now, if the trust is something where it lives on for some reason, that’s a benefit of a trust, you don’t have to terminate it right away. The majority of trusts will terminate on the passing of the last spouse.
Therefore, the person will take the list of all the assets and it sends out to the beneficiaries. They will see the trust, gather all the assets, and distribute them. So, a specific gift will go out of the estate first. For instance, when someone is drafting their trust, and they want to give $100,000 to someone else, I usually advise people to only do a percentage because you don’t know how much you’re going to die with, and specific gifts will go out of your estate first. You might be really being nice to your friends, but you might give your friend more than your heirs will get because when you pass away, you won’t usually have as much money as you thought when you wrote the will.
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