Bobby’s Estate Planning Mythbuster: Access to Assets Held in a Revocable Trust

Bobby’s Estate Planning Mythbuster: Access to Assets Held in a Revocable Trust

Myth: If you set up a revocable trust, you lose control and access to your assets.

Truth: You have just as much control – if not more – when you create a revocable trust and transfer assets to the trust.

A trust is basically a contract between a trustmaker (i.e. you – the person who creates the trust), a trustee (i.e. one who controls the trust; can be you or someone else) and beneficiaries (i.e. the people entitled to benefit from the trust). As the grantor, you determine how the trust will be operated by the trustee and who benefits.

There are numerous benefits to establishing a revocable trust, but one of the most attractive benefits is maintaining total control over the assets in the trust while you’re alive. This allows you to better plan for a potential disability and gives you the power to decide when you give up control over those assets with a personalized definition contained in the trust instrument, according to AARP.

This approach is much better than the alternative – having a court or two licensed physicians any where in the world make the determination that you are disabled and no longer able to make decisions. Moreover, this approach to disability planning allows for a private transfer of your assets (versus court supervised), to personally selected trustees with your own customized instructions (e.g. I want to live in my home as long as reasonably possible).

Other benefits of establishing a trust is flexibility. As mentioned above, you can establish a trust that permits you to be trustee and give you the right to receive full benefits from it (a.k.a. revocable living trust). Many people actually use a revocable living trust as a substitute to a traditional will.

Another major benefit of a trust is avoiding probate, a potentially expensive and lengthy process that is required if you rely on a will to distribute the assets of your estate.

Other advantages of a revocable trust includes:

1. Asset protection for your spouse.
2. Remarriage Protection – protecting your assets if your spouse decides to re-marry after you pass away.
3. Special needs planning for disabled beneficiaries.
4. Asset protection for your kids and loved one who may not be very good with managing money or other assets.
5. Disability planning in case you become disabled prior to death.
6. Divorce Protection for your loved ones to help protects assets from going to disliked “in laws”.
7. Courts do not get involved. If structured properly, your assets are handled privately entirely by your designated trustee.
8. Plan for proper management of your business in your absence.

To learn more about the advantages of establishing a trust, consider speaking with an experienced estate planning attorney in your area.