There are many reasons why using a revocable trust-based plan may be more advantageous than planning with a last will and testament to distribute your estate at your death. Revocable trusts provide families with privacy at death. Unlike a will, a trust is not public record. Instead, trusts are private contracts that can act as significant asset-protection tools.
Revocable trusts help families avoid high court costs associated with probating a will. Those with a probate estate of $1 million or more can expect court costs of $6,000. The court costs in a probate for one person can be more than the cost of paying an attorney to draft a revocable trust, which will allow a couple to avoid these fees at the death of each spouse.
Planning with a revocable trust can help families in a variety of situations, such as those who have special needs children, those who have children with alcohol or gambling addictions, or those with children who do not manage money well. In addition, you can leave your assets in trust to a child who receives government assistance without upsetting his or her benefits.
Revocable trusts are particularly helpful if you own property in another state, as putting your assets inside a trust will allow you to avoid probate costs in both states at your death. Without a trust, you may be forced to pay high probate fees in any state in which you own property, in addition to those fees that you must pay in North Carolina.
Lastly, revocable trusts can prevent your family from overcoming the planning that you put in place. North Carolina General Statutes provide multiple ways for family members to challenge your will. To avoid this, we draft trusts that contain a “no contest” clause, which prevent family members from inheriting if they challenge your trust.
Unfortunately, a revocable trust does not provide protection from creditors while you’re still alive, as it is an agreement that you created for the benefit of yourself. Since you have the right to change this type of trust, your creditors can access your assets during your lifetime. However, at your death, your revocable trust can provide asset protection for your spouse and your children.
If you have questions about revocable-trust based planning, Medicaid, or Veterans benefits, consider W.G. Alexander & Associates – we offer a unique blend of asset protection, Elder Law and estate planning. You can also attend our free seminars, learn more through our website at www.wgalaw.com, or call us at (919) 256-7000. Also, every Tuesday morning at 9 am, you can listen to our radio show, “Asset Protection Today,” on Talk Radio 850 WPTK (AM) with Attorney Bill Alexander.