Revocable Trusts

Protecting Your Assets with a Revocable Trusts


Revocable Trusts have been used primarily used in the past to avoid probate. The main advantage was to minimize probate or in some cases even to avoid it as part of an estate plan.

Today these forms of trusts are more varied and have gotten a bit more complex.

Some examples of using a revocable trust are:

  1. Revocable trust can protect your children from losing family assets in a divorce.
  2. Limiting a change of legal location – no action of the local court is required thereby moving the trust may be much easier.
  3. Aging or infirm individuals, the approach is to create a fund in the trust that also includes assets will minimize the delays and risks as the individual ages or health worsens.
  4. Protecting special-needs child – the revocable trust contains special-needs language to permit the financing of care during the donor’s incapacity, not just after death.
  5. Identity theft – If an individual tax ID is stolen the impact will be lessened as revocable trusts operate under its own tax identification number vs. an individual’s Social Security number.

Revocable Trusts do not escape federal taxation as it does not remove the assets from the estate. If your plans are to minimize estate taxes, then you will need to discuss irrevocable trusts instead with your estate planning attorney.

The rules can be complex when setting up any type of form of trust so I recommend that you seek professional help from your financial advisor as well as an estate planning attorney.

Daniel Iuculano, AAMS CMFC

Accredited Asset Management Specialist

Chartered Mutual Fund Counselor

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