Having an estate plan is important, but some people stop short of making a complete plan. A last will and testament has always been the most recognized estate document, but revocable trusts have steadily gained interest. Just as a will has an executor, a revocable trust has a trustee. Read on to learn more about how trusts work and the role of the trustee.
What makes a trust revocable?
Where a will can (and should) be updated every so often, a trust can too. As the trust's creator and owner, you can make changes any time you wish, including removing beneficiaries, adding property, removing property, and doing away with the trust altogether. As long as the owner of the trust is living, it is considered revocable. Upon the trust owner's death, the trust will stand as is and no more adjustments can be made.
The trustee and the trustee
You will appoint a trusted family member or friend to administer the trust after your death. This job is very similar to the one of executor (personal representative) with one major exception: there's no need for the trustee to follow the will through the probate courts since a trust does not get filed in probate court. When the owner of the trust passes away the trust can be put into action as soon as the death certificate becomes available, which usually occurs in a week or so. It should be mentioned that some trusts contain directives dealing with the owner's incapacity where the trustee will be in charge of financial affairs if the owner is no longer able to do so. This provides another level of coverage that a will cannot.
The trustee and the duties
It might be said that the duties of the trustee are somewhat less than that of an executor, but only if the estate plan and the trust involve little property. While there is no need to probate a trust, there can be the potential for a fairly complicated revocable trust due to the way they expand property dispositions. While those creating a will are discouraged from bequeathing property with conditions, this very issue is what makes trusts so appealing.
For example, if you want to leave a sum of money to a granddaughter to use for college, a trust allows you to go even further. The money can be held in its own trust with conditions, like being dispersed in increments, only to pay tuition, only to pay for certain plans of study, only if the grades are sufficient, etc. This can make the trustee's job more difficult, but there can also be provisions for paying the trustee for their time and attention to estate matters.
Talk to an estate planning lawyer like those with Barrett Twomey Broom Hughes & Hoke LLP to find out how your estate can be made better by using a revocable trust.