You Can Live Without A Revocable Trust, And So Can Your Heirs
If you look for estate planning checklists online, you might see “establish a revocable trust and fund it” right after writing a will and signing a medical advance directive. Everyone needs a written expression of their wishes about their own medical care in a worst-case scenario, and almost everyone’s probate case would be simpler with a will than without one. Therefore, it makes sense to say that everyone needs a will and a healthcare power of attorney. Revocable trusts, however, are not an essential building block of estate planning, even though they are increasingly popular, and they have a considerable variety of practical uses. You should only establish a revocable trust if there is not a simpler way to get the designated assets to the intended beneficiary. Trusts involve an elaborate charade of setting up a corporate doppelganger and giving it your money so that the money does not legally belong to you. Such legal sleight of hand is not cheap, and you should only do it if setting up a trust enables you to provide for the beneficiaries less expensively and with less risk. To find out how to provide for your family without the probate court and the IRS getting in the way, with or without a revocable trust, contact a Tampa estate planning lawyer.
Revocable Trusts Are a Lousy Status Symbol
Old people get a kick out of grumping about how young people fall for silly fads that are a waste of money. You aren’t sure you want to know how much your granddaughter spent at the salon getting a new set of eyelashes so heavy that they make blinking feel like an Olympic sport. And what’s with destination weddings? The joke is on you, though, if you established a revocable trust just because a financial planner told you to, or worse, a personal finance influencer talked it up on YouTube. If you have a revocable trust because it was part of a package deal of personal finance tools for seniors, you probably do not need one. You only need a revocable trust if you are trying to set aside money for a specific need, such as the expenses of a disabled relative whose only other source of income is government benefits, or your grandchildren’s college tuition.
Revocable Trusts Are Not So Great at Tax Avoidance, Either
A main draw of trusts is that they ostensibly save you money on taxes; if the money isn’t yours, you don’t have to pay taxes on it. The problem is that this rule only applies to irrevocable trusts. Revocable trusts become irrevocable after the grantor dies, so as long as you are alive and holding the power to amend your revocable trust, its property still legally belongs to you, and you are still responsible for paying taxes on it.
Contact David Toback About the Seeing Past the Estate Planning Hype
A Central Florida estate planning lawyer can help you set up a revocable trust, but only if you need one. Contact David Toback in Tampa, Florida to set up a consultation.
Source:
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