|Some facts about revocable trusts:|
|We do not promote nor to we prepare revocable trusts. If this is something you wish to do in your estate planning or if your situation calls for it, we will be happy to refer you to a lawyer that does them. Generally there is no tax benefit to a revocable trust for the very reason it is revocable. See the irrevocable trust link for more information. So then what are the other reasons you may want one? A Revocable trust does reduce the size of your estate for probate fee purposes but that cost saving can be offset by the cost of the trust itself. Failure to include all your assets or your later acquisitions to your trust can result in the cost of both a trust and a probatable estate.
If you have created irrevocable trusts to go into effect at your death as part of your estate plan "tax planning" then a revocable trust that is tied to the irrevocable trust can make a lot of sense. However, such planning is not appropriate for every family. The only trust many people include in their will is a trust for minor children that is based on the child's maturity and not for purposes of tax panning. In those cases we would not recommend a revocable trust. Other reasons some people find such a trust beneficial are when there are assets in multiple states, there is a benefit to a business transition or you just do not want nosy neighbors going to the courthouse to look at your estate filings after your death (though that is very rare).
Some trust marketers infer that a revocable trust will reduce estate taxes. That is simply false. Others will point out that a revocable trust will reduce the size of your estate and therefore reduce probate costs. That is usually true however that is only part of the story. The cost saving can often be illusory depending on the size and nature of your estate and the cost of the trust. That is because instead of your heirs paying a probate fee after your death in tomorrows dollars, you are paying a legal fee in thousands of today's dollars to prepare the trust while you are alive. Some cynics look at it as a choice between “pay me now” (with a revocable trust) or “pay me later” (with a probatable estate).
Don’t be convinced to purchase a revocable “living” trust without fully understanding the cost differential, the obligations of maintaining the trust and the actual benefits of getting a trust. Make sure that you have the ability and will to maintain separate trust estate during your lifetime. Also get a second opinion from a disinterested party as to the value of such a decision. If it's right for you then you will be secure in the knowledge you have done your homework.