Estate planning is an important part of strategizing for your financial future. This process is necessary as you acquire more assets, but estate planning is not just for the wealthy. Everyone should have an estate plan in place to protect their loved ones after they pass away. If you’re a Texas resident, a living trust, also called a revocable trust, is a great option since it provides several benefits.
What is a revocable trust?
Essentially, revocable trusts are will replacements. Instead of directing your assets toward the courts for probate administration, your assets are directed to a private entity or trust. When it comes to the estate planning process, it’s important to be as flexible as possible, which is why revocable trusts could be the best option for you. Revocable trusts can be amended or revoked throughout your lifetime. These are not to be confused with irrevocable trusts, which are most often used to remove assets like shares of family companies or life insurance policies from an estate for tax reasons.
Avoiding probate court
One of the benefits of including revocable trusts in your estate planning is skipping the probate court process. Probate is the court proceeding where your representative is assigned and asset distribution is supervised. Your debt repayment process will be supervised during probate as well. All of these processes are monitored by a judge. Probate can be rather time-consuming and costly, which is why you’ll likely want to avoid it if you can.
By placing assets like your business interest, cabin or home in a revocable trust or naming the trust as a beneficiary on your brokerage or life insurance account, your assets will be distributed as you see fit. Then, you won’t have to worry about court supervision. If you have a revocable trust, you also won’t have to worry about a relative or court-appointed manager taking over your estate if you become mentally or physically disabled.