Many people hear there are numerous benefits to trusts, but do you really know what they are? There are several different types of trusts and they each have their own pros and cons. When it comes to revocable trusts, some of the benefits include:
- Trusts do not have to go through the probate process
- Trusts are private – your assets and named beneficiaries are not a matter of public record
- There is no delay in the distribution of the assets in the trust
- Title to your assets can be easily transferred
- Trusts allow for more specific and protective management of assets for family members without the worry of the beneficiary’s level of personal responsibility.
- Children from a previous marriage can be provided for
Revocable trusts allow for active control by you, the grantor, and can be amended or even revoked at any time (for instance, upon remarriage or need to use assets from the trust).
Irrevocable trusts are less easily amended. However, the irrevocability of this type of trust may protect assets from estate taxes. Irrevocable trust assets are protected from creditors, lawsuits and probate laws. If the person who has granted the trust needs nursing home care, the assets from this trust are not included in Medicaid eligibility determination.