As a parent, your top priority is making sure your children are cared for, no matter what the future holds. A revocable trust—sometimes called a revocable living trust—offers a flexible and powerful way to protect your assets and ensure your children are provided for if something happens to you. Not only does it allow you to control your assets during your lifetime, but it also gives you the ability to adjust or even dissolve the trust as your family's needs change.
At Halterman Law, LLC, we understand that parents want to make the best decisions for their children's future. During a Peace of Mind Planning Session, we'll listen to your concerns and help you determine if a revocable trust is the right choice for your family. You can reach us online or at (614) 420-2038 to explore how a trust can secure your children's future.
What Is a Revocable Trust?
A revocable trust is a legal arrangement that lets you manage and control your assets while you're alive. If you're a parent, this can include everything from your home and savings accounts to life insurance policies and investments. The best part? You can change the trust's terms or even cancel it altogether if your circumstances change—whether that's welcoming another child into your family or simply adjusting to new financial goals.
When you pass away, the trust ensures your assets are distributed according to your wishes, helping to provide for your children without the delays and hassles of probate.
What Can You Include in a Revocable Trust?
Here are some examples of what you, as a parent, might place in a revocable trust to benefit your children:
- Your family home: Ensures that your children can continue living in the family home or have the financial means to sell it if necessary.
- Savings accounts: Provides financial security for your children's education or other future needs.
- Life insurance policies: Guarantees that the payout goes directly into the trust, where it can be managed for your children's benefit.
- Investments: Allows your children to benefit from long-term investments as they mature.
- Business interests: Ensures that a family business can be maintained or sold, with the proceeds benefiting your children.
Why Should Parents Consider a Revocable Trust?
There are distinct advantages to using a revocable trust as an estate planning tool. Below are brief descriptions of the most common advantages. Not all may apply in your unique situation. Likewise, there may be other advantages not listed below. It is important to seek the advice of an estate planning attorney to ensure the trust you choose is the right one.
Here are some key reasons why a revocable trust is a smart choice for parents with minor children:
1. Avoiding Probate
Probate can be a lengthy and stressful process, especially for young families. If your assets are held in a revocable trust, they generally won't have to go through probate. This means your children can access what they need more quickly and without the extra legal hurdles.
Example: Imagine you've set aside money in a savings account for your child's college education. If that money is in a revocable trust, your child could potentially access those funds immediately after your passing, avoiding the delays of probate.
2. Flexibility
As a parent, your life is constantly evolving, and a revocable trust allows you to adapt. Whether you're buying a new home, welcoming a new child, or updating your financial plans, a revocable trust gives you the flexibility to make changes as needed.
Example: You might decide to add a new investment account to the trust or update the terms to reflect your wishes as your children grow older.
3. Incapacity Protection
If you become incapacitated due to illness or injury, a revocable trust ensures your children's financial needs are still met. A successor trustee can step in to manage the trust, ensuring that your children's expenses, like schooling or medical care, are covered.
Example: If you're unable to manage your affairs due to a medical condition, the trust could ensure that mortgage payments on your home are made and your children's day-to-day needs are taken care of.
4. Privacy
Protecting your children's privacy is crucial. Unlike a will, which becomes public during probate, a revocable trust keeps your financial matters private. This means that your family's finances are shielded from public scrutiny, which can be especially important when you have young children.
Example: If you want to keep your children's inheritance confidential, a trust ensures that details like account balances or property values aren't exposed in public court records.
Are There Any Downsides?
While revocable trusts offer many benefits, it's important to be aware of potential downsides, especially for parents:
1. Time and Cost
Setting up a revocable trust can take more time and cost more money upfront than creating a simple will. You'll need to transfer assets into the trust, which can involve updating deeds, titles, and other legal documents.
Example: Moving your family home into the trust might require some paperwork, but it can save your children time and money down the line by avoiding probate. At Halterman Law, LLC, we will help you move assets, like your home, into your trust.
2. Limited Asset Protection
Unlike some other types of trusts, a revocable trust does not protect your assets from creditors. If you're concerned about shielding your children's inheritance from potential claims, you might need to explore additional options.
Example: If you're involved in a lawsuit, the assets in a revocable trust could still be at risk. However, depending upon how you design the trust, there may asset protection for your kids to prevent them from losing your money through divorce, lawsuits or poor spending.
Let's Secure Your Children's Future Together
A revocable trust can be a powerful tool for parents who want to ensure their children are provided for, no matter what happens. But it's not a one-size-fits-all solution. To find out if a revocable trust is the right choice for your family, contact Halterman Law, LLC today. We'll schedule a Peace of Mind Planning Session to discuss your wishes, address your concerns, and create a personalized estate plan that puts your children first.
Reach out online or call us at (614) 420-2038. We're here to help you protect what matters most- your children.
