Many people establish living trusts as part of their estate planning. At the time that the trusts are setup, revoking it might not be in your future plans, but sometimes, it is necessary. If you are considering revoking your living trust, here is what you need to know.
Why Should You Revoke Your Trust?
There are several reasons for revoking a living trust, including a change to marital status. If you are divorced or in the process of separating from your spouse, removing him or her from the trust makes sense. If you fail to do so, it is likely that your spouse will still receive the proceeds from the trust that were outlined for him or her.
Another reason to revoke the trust is to clear up confusion. As modifications are made to the trust to account for changes in your life, the language of the trust can sometimes become muddled. For instance, if you have amended your trust several times to account for the birth of children, a divorce and second marriage, or the addition of a charity to the beneficiaries, who the beneficiaries are and what they are entitled to can become confusing to follow.
Are There Alternatives to a Living Trust?
One of the main benefits of a living trust is that it can help your estate avoid probate. However, if you revoke the trust, you have to find alternative ways to accomplish this goal. There are several methods available to you. Your financial situation and other estate planning goals dictate which option is best for you.
A commonly used alternative to a living trust is a joint title for all assets. Each beneficiary can be added to the title or deed for designated assets so that they can take ownership of the asset without going through probate. For instance, if you want to leave your home to your adult child, you can add his or her name to the title. When you pass away, he or she will be the sole owner of the property.
Another option for retirement plans, life insurance policies, and bank accounts is to list your beneficiaries as the heirs of the contents on the accounts when you die. For instance, you can complete a form at your bank and list your heir as the person to receive all of the funds upon your death.
To explore other alternatives to a living trust and to determine if revoking yours is the best course of action, work with an experienced attorney, such as Patricia K Wood Atty.Share