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The following article was published in Your Health Magazine. Our mission is to empower people to live healthier.
Mary Baker, LCPC
Revocable Trusts What They Can and Cannot Do For You
Sol Purpose Life & Empowerment Counseling & Coaching

Revocable Trusts What They Can and Cannot Do For You

It seems that at least once a week there is an article in a magazine like this one, in the newspaper or on television or the radio that discusses trusts. Trusts come in many different categories, but we are going to discuss only one the revocable trust. The purpose of this article is simply to provide a working knowledge of a revocable trust so that you may determine if this vehicle is one that will assist you in achieving your estate planning goals.
As the name implies, a revocable trust is one that you can modify at any time or revoke completely. Typically, the creator of the trust, sometimes referred to as the grantor or settlor, is one of the trustees and is also the initial beneficiary of the trust. The trustee holds legal title to the assets of the trust; the beneficiary as the person enjoying the financial benefits is the equitable owner.
Assets that are titled in the name of the trust (your home, investment accounts, bank accounts, etc.) are subject to the terms of the trust. During the creators lifetime, the assets are available for the creators benefit. Following the creators death, the trust agreement provides the trustee with instructions as to how the trust assets are to be distributed in much the same way as a Will would provide. Because trust assets are not considered part of a decedents probate estate , the revocable trust allows the distribution of the trust assets following the creators death without the supervision of the probate court which in some states is a tedious procedure.
What a revocable trust will not provide is federal or state estate tax savings. The assets that are titled in the name of the revocable trust at the time of the creators death are subject to the same state and federal estate taxes as would be imposed had the assets been titled in the decedents name. However, language can be included in the revocable trust to minimize or eliminate federal and state estate taxes in the same way that tax saving language can be incorporated into a Will to reduce estate tax exposure.
So as long as we understand the capabilities and limitations of the revocable trust, it is a viable tool in estate planning.

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