Estate plans are not a one-size-fits-all commodity, especially when it comes to trusts. Revocable trusts make sense for many Las Cruces retirees many, but not in all cases, says a recent article from Kiplinger, “Four Reasons Retirees Need a (Revocable) Trust.”
Revocable trusts provide the ability to have complete control over your assets and how you would like them to be distributed, without court involvement or a very public court proceeding.
How can you tell whether or not you need a revocable trust? Consider the following four reasons.
Would you prefer to avoid probate?
When Las Cruces retirees tell our estate planning firm that they need a trust, no matter what, there’s usually a family story involved. Maybe a parent created a trust that worked well, or maybe their parents didn’t have a trust, and they had a difficult experience in probate court.
Avoiding probate is a good reason to have a trust. Assets passing through a will go through probate, which is different depending on your jurisdiction. It can be expensive and time-consuming, although it can also be painless. Experienced Estate Planning Attorney Michele Ungvarsky explains in her masterclass, “What to Do When a Loved One Dies,” what you can expect with a New Mexico probate proceeding and how E-Law guides Las Cruces retirees through the process.
Trusts are especially useful for people who own assets in multiple states because assets must be probated in each state. With a trust, assets pass to heirs directly and efficiently.
Do you want to control your estate?
If some of your adult children are good with finances, but some are not, a trust allows you to structure asset distribution with great specificity. A certain percentage of assets can be released at certain ages, or annual distributions can be made according to any guidelines you set.
Would you prefer your estate to be private?
Creating an estate plan is often an emotional process, balancing your goals and family dynamics. These wishes are typically kept private, except those who have some role in creating the plan. If your assets pass through probate, remember the will becomes part of the public record once it is admitted to probate. Anyone, from an estranged family member to a scammer, can see what you gave and who you gave it to. Trusts, on the other hand, are private.
Do you have a plan for incapacity?
Your estate plan should contain a number of documents in case of incapacity, including Power of Attorney, Healthcare Proxy and a Living Will. In addition, a revocable trust with a successor trustee will create continuity and simplicity in managing your financial matters. The successor trustee named in the trust document will manage the assets according to the terms of the trust if you become incapacitated. Without such a trust in place, your family would need to go through the legal process of seeking a conservator to manage the assets in the trust.
Las Cruces Estate Planning Attorney Michele Ungvarsky is the best person to discuss whether or not a revocable trust belongs in your estate plan, along with other planning strategies. Request a consultation with her office to get started.
Reference: Kiplinger (Sep. 13, 2023) “Four Reasons Retirees Need a (Revocable) Trust”