Some people in Saint Paul may have executed a will and think that their estate planning duties are done. After all, the will specifies who will inherit what once the testator dies, so what more is needed? While a will can certainly accomplish that goal, it will have to go through the time-consuming, public, and costly probate process before the person’s assets can be distributed to their heirs. Therefore, those who want to avoid probate and keep their financial information private may want to consider executing a trust, either in place of or in addition to, a will.
Some people may think that trusts are only for the mega-wealthy who have many valuable assets to pass on. However, a revocable trust could prove to be useful for a person of just about any financial means. Revocable trusts bypass probate, meaning they are shielded from the public and can immediately pass on funds to the trust beneficiaries.
In addition, through a revocable trust, a person’s bills will be paid while they are still alive, even if they become incapacitated. This is becoming increasingly important, as people these days are living longer than ever. This means more people will eventually become incapacitated and unable to manage their financial affairs. According to the U.S. Centers for Disease Control and Prevention, approximately 5.5 million people in the United States have Alzheimer’s, which is the fifth leading cause of death for those age 65 and above.
If a person has a revocable trust, their assets will be titled in the name of the trust. This way, even if they are incapacitated, their bills will still be paid. Moreover, if the person had been giving a relative financial help, a revocable trust can make sure this support continues while the person is still alive. It is possible for a person to make alterations to their revocable trust while they are alive if, after time goes by, they find they have different financial goals.
A revocable trust must be properly drafted and funded. Without funds in the trust, there is nothing to be distributed to the trust beneficiaries. And, if the trust isn’t properly executed, it could be found invalid should it be challenged in court. Therefore, those who are interested in learning more about wills and trusts may want to seek professional advice.
Source: The New York Times, “Life After Your Death? Here’s Why You Should Have a Trust,” Elizabeth Olson, March 22, 2018