Revocable trusts are one of the estate planning tools available to people in Ohio. Revocable trusts are an alternative to irrevocable trusts. These trusts are used for many different reasons, including helping to shield assets from potential losses and making it possible for family members to receive some assets outside of the probate process after death. While revocable trusts have many significant benefits for people who create them, there are also some downsides or disadvantages as well.
Zimmer Law Firm understands the pros and cons of revocable trusts. Our Blue Ash estate planning attorneys have a comprehensive understanding of how these trusts work and of how they compare to other types of trusts as well as to other estate planning tools. We can provide guidance on whether a revocable trust is right for you and can help you with the creation of revocable trusts when it is determined that this type of trust should be a part of your comprehensive plan for your future.
Pros and Cons of Revocable Trusts
Many people appreciate the advantages of revocable trusts, which is why this type of trust is so common. Some of the benefits of creating a revocable trust include the following:
- The possibility of avoiding probate. After a death, the executor of the deceased’s estate needs to file paperwork with the appropriate court and go through the probate process. The Hamilton County probate court is the court that will preside over the probate process when the deceased has property in Blue Ash, Ohio. The probate process can take time, especially if any conflicts arise among beneficiaries or other problems arise during the process. When a revocable trust is created and assets are transferred using the trust, this process is avoided and trust beneficiaries can begin benefitting from the trust assets sooner.
- A multi-state legal process can be avoided. In some situations, people own property in many different states. When this happens and the deceased passes away, probate could be required in all of the different locations where property is located. This could become a major hassle for beneficiaries. It is not necessary for probate in different locations to occur, however, when property is owned by a revocable trust.
- Your property can be effectively managed in case of a disability or incapacity. When you create a revocable trust, you can act as the trustee on the trust. However, you can also set up the trust so that if you become incapacitated, someone else takes over. This person can then step in and act for you when you need it. A revocable trust can thus serve as an alternative to a power of attorney, while allowing you to still maintain complete control over your property and assets as long as you are not incapacitated.
These are just some of the benefits associated with creating a revocable trust which prompt many people to use this legal option. There are also some disadvantages to consider as well, including the following:
- Setting up a revocable trust costs money. Although you and your heirs can end up saving in the future, there is an initial cost associated with legal fees and trust creation as well as a cost for things like preparing and recording deeds which is necessary when assets are transferred to the trust.
- Setting up a revocable trust triggers ongoing accounting requirements. You need to ensure you are in compliance with the laws regarding managing assets in revocable trusts. This means learning accounting rules and keeping organized books and comprehensive and accurate financial records.
- Tax planning is limited with a revocable trust. Unlike certain other types of trusts, a revocable trust does not provide tax benefits since you still are in complete control of the property and the property is still considered part of your estate when determining if federal estate taxes will be assessed.
- It is still necessary to have a will. Some assets are generally kept outside of the trust, so you will still need a will to deal with how those are distributed.
Getting Help from a Lawyer with Revocable Trusts
Zimmer Law Firm can provide you with comprehensive assistance in determining what type of trust is appropriate and in creating a trust that protects your assets and helps you to secure a legacy for your heirs. To learn more about revocable trusts, join us for a free seminar. You can also contact us at 513.721.1513 to get personalized advice about what type of trusts and estate planning tools are the right ones to meet your needs.