You have been working on estate planning over the last month or so, and you’re getting ready to go to an attorney for the first time. You want to set up a trust, but you’re not sure which one is right for you. Fortunately, there is a lot of information to be had on the subject.
The two main forms of trusts are irrevocable and revocable trusts. Of the two, the revocable trust is the only one that allows you to make changes after it’s set up.
What are some reasons to choose a revocable trust?
There are several reasons to choose this kind of trust over an irrevocable form. The primary reason is that it gives you more control. Revocable trusts allow you to help your family avoid probate while also allowing you to maintain your privacy and to make it easier to transition your estate following your death.
Assets that you place into a trust generally move more quickly to your beneficiaries. Additionally, your revocable trust offers you more financial protection. Trusts have FDIC protection against losses up to $1.25 million ($250,000 for each beneficiary with a maximum of five). Additional beneficiaries may also increase protection by $250,000, but if you have more than five to include, you need to be cautious about how you do so. Your attorney can help you set up an additional trust or make sure that any new beneficiaries and their assets are protected.
These are just a few reasons to consider a revocable trust. Since you can change it any time and have control, this is one trust that gives you better peace of mind while still offering you a way to help your family avoid probate.