When Simon's father passed away two years ago, he didn't think much about how his estate would be handled. His mother had died five years before, and his dad's will was clear about how his assets would be divided. Then came probate, a process to confirm the validity of his will. Not only did unexpected fees come out of his dad's estate, it took almost a year to settle and distribute it.
After his experience with probate, Simon didn't want to put his family through the same painful delays and expense. He wondered if there might possibly be a different solution. So, he turned to his financial advisor, who explained that the simplest way for Simon's estate to avoid probate hassles and costs would be to have his assets pass directly to his heirs. To do this, Simon would need to create a trust - the most common type being a revocable living trust1. This estate planning tool would allow Simon to put his assets where he wanted them to go and allow him to retain control over those assets until his death. He could also choose a successor trustee to distribute his assets according to his instructions after he passed away. If Simon changed his mind, his financial advisor explained that he could “revoke” or terminate the trust at any time.
Through the expert lens of his financial advisor, Simon discovered several advantages a revocable trust offered him:
To be thorough, his financial advisor also cautioned Simon on some of the drawbacks of a revocable trust:
However, these disadvantages can be managed with expert guidance.’ or something similar. This powerful tool relies on a team approach, starting with a professional financial advisor. Not only can they help you identify and prioritize your goals, but they can also help you decide if a trust is a good fit for you.
If it is, they can coordinate with your team of tax and legal professionals to ensure that your living trust is established in the right way for the right reasons. If you're thinking about estate planning, the best place to start is with a financial advisor.
Contact our office today to get the conversation started.
*Fictional characters for illustrative purposes only. 1Types of Trusts
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