4 Myths About Revocable Trusts

4 Myths About Revocable TrustsThere is no denying that trusts are an essential part of estate planning. However, because there are several types of trusts (all with different purposes), it confuses many of our clients. The most common trust is a revocable trust, which you may know as a living trust or a revocable living trust. Its purpose is primarily to pass assets to your beneficiaries without probate. Revocable trusts are active while you are living, and they allow you to make changes to the terms.

While there are major benefits to revocable trusts, there are also a lot of misconceptions surrounding them. To clear up the confusion, our legal team at Dana and Associates is covering some of the most common myths about revocable trusts. Keep reading to learn whether or not they are true.

Myth 1: Revocable Trusts are Only for Wealthy People 

It’s true that a lot of one-percenters set up revocable trusts. However, that doesn’t mean they are the only ones who should! Many people with average incomes find revocable trusts to be incredibly beneficial. If you’re interested in setting one up, our team here at Dana and Associates would be more than happy to help—regardless of your income.

Myth 2: Revocable Trusts Only Benefit Beneficiaries, Not Grantors 

4 Myths About Revocable TrustsSome people believe that revocable trusts only benefit the beneficiaries of the trust and not the grantor (the person who makes it). While it’s true that the primary reason for creating revocable trusts is ensuring that assets are quickly and easily delivered to heirs, that’s not the only benefit.

Revocable trusts give the grantor control over how their future affairs are handled and how their assets are distributed. Additionally, they maintain the grantor’s privacy because—unlike a Will—the contents of a revocable trust are not public record in Arizona.

Myth 3: You Can’t Access Your Funds in a Revocable Trust

Revocable trusts are called “living trusts” for a reason. As the grantor of the trust, you remain in control of your assets for as long as you live. Essentially, this means that you have full, continuous access to all the funds in your trust.

You’re in charge of how and when your assets are distributed to beneficiaries. Also, you control who will gain control of your trust if you become incapacitated.

Myth 4: Revocable Trusts Automatically Avoid Probate

4 Myths About Revocable TrustsYes, it’s true that a revocable trust can help you avoid probate. However, setting one up is merely the first step. Once your trust is set up, an experienced estate planning attorney can help you fund or transfer your assets into your living trust. Any property that isn’t funded or transferred will in turn be subject to probate. Our team at Dana and Associates ensures that you don’t overlook this step by including a Trust Asset Coordination Session, a meeting scheduled two to three weeks after the signing of your documents.

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Estate planning can be a lengthy and confusing process. Hopefully, this article covering some of the common myths about revocable trusts was able to provide you with a bit of clarity. Revocable trusts are a terrific way to preserve your legacy. If you haven’t set one up yet, you should continue researching or give us a call to determine if it’s right for you.

Our legal team here at Dana and Associates has ample experience designing custom legal plans to suit your personal needs. If you’re interested in setting up a revocable trust or a customized estate plan, contact our team today.