Veronica Karas is a CERTIFIED FINANCIAL PLANNER, a professional who has been in the finance industry for over a decade. She began her career in life insurance then quickly moved into investment research before grabbing the opportunity to pursue her passion for financial planning.

1. Revocable Trusts
I am way too tired from this weekend to come up with a really
fancy title for this post.. so here goes.. straight and to the
point.
The greatest benefit of a revocable trust is that it simplifies the
estate-planning process. When a person without a trust
passes away, their property is disposed of by a probate court.
Not only is this a time-consuming and often costly process, it
also generates a public record of the property being passed to
heirs. To elaborate on this, there are certain states where it is
particularly crucial to avoid the probate process because it
becomes TOO costly and TOO cumbersome to be reasonable.
Those people living in Florida, for instance, should do
everything possible to ensure they avoid probate. Make sure

2. to do some research to find out how “bad” the probate
process is in your state. Licensed Financial Advisor
Any property transferred to a revocable trust is no longer
considered a part of your probate estate. It will pass to your
heirs in the manner laid out in the governing trust documents
without the need of a court’s intervention. This avoids the
creation of a publicly available document outlining your assets
and their disposition.
Making revocable trusts even more attractive is the ease with
which they can be set up. Almost all attorneys that write Wills
also write Revocable Trusts. The most important thing to keep
in mind is that you need to formally transfer the assets to the
trust and designate who the trustee and beneficiaries are —
in the case of revocable trusts, these are all generally the
grantor until he or she passes away, at which point a successor
trustee distributes the trust’s assets to the residual
beneficiaries.
Essentially, while you’re alive, the Revocable Trust functions
as a personal account with a fancy title. Once you pass, the
document directs how your assets are distributed. No one
needs to approve and the trust doesn’t get filed anywhere
until your death – which also means you can amend your
revocable trust as many times as you’d like, as long as you’re
alive and in good mental health.
That being said, there are two downsides to using a revocable
trust as opposed to an irrevocable one. First, unlike an
irrevocable trust, a revocable trust doesn’t protect the assets
therein from the grantor’s creditors or legal liability. Because

3. a transfer to an irrevocable trust is, well, irrevocable, its assets
are no longer owned by the grantor. Thus, if the grantor incurs
a legal liability or owes money to a creditor, those assets can’t
be used to satisfy the debt any more than, say, the assets of
the grantor’s neighbor. Wealth Management Advisor
And second, while a revocable trust allows the assets therein
to avoid probate, they are still formally a part of your estate
and thus incur estate taxes. Again, just for the sake of
comparison, because the assets in an irrevocable trust are no
longer yours, they neither go through the probate process nor
are they subject to estate taxes.
The net result is this: If you’re simply looking for a legal device
that will assist your estate-planning process without affording
any immediate benefits or protection, then a revocable trust
may be the way to go. This is particularly true if you want the
flexibility offered by the power to revoke the legal entity. But
if you also want to protect your assets while you’re still alive,
and you don’t mind relinquishing the right to later change your
mind and undo the transfer, then the best course may be an
irrevocable trust instead.
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www.veronicakaras.com | veronica@themoneymattersbook.com