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Keep these tips in mind when creating a revocable trust

There are many estate planning options that people in Moorestown can choose from. One estate planning option can include a revocable trust (also referred to as a "living trust"). However, there are some facts about revocable trusts that a person should understand before creating one.

First, some assets already have beneficiaries named. These include life insurance policies, certain types of retirement accounts and pay-upon-death financial accounts. These types of accounts will not have to be submitted to the probate process; they will go directly to the named beneficiary. Therefore, it may not be necessary to include them in the trust. One option, however, is to name the trust as the primary beneficiary of the account.

In addition, one reason some people choose to create a revocable trust is because a trust, which is not submitted to probate, will not be made available to the public. However, there are some instances in which the contents of the revocable trust will be made known at least to some. If the revocable trust names a beneficiary to whom an immediate distribution will be made, that beneficiary will receive a copy of the trust once the creator of the trust passes away. Also, if a beneficiary of the trust contests the estate, and files a lawsuit against the trustee, all beneficiaries will receive a copy of the trust document.

Finally, it is often helpful to have both a revocable trust and a "pour-over will." In a pour-over will, a person's assets are transferred to the trust once the creator of the trust passes away. Moreover, because the assets in a will go through probate, the time in which a creditor has to make a claim is shortened.

These are some advantages to creating a revocable trust. However, just like any other estate planning document, there are many nuances when it comes to creating such an instrument. Therefore, it may be beneficial to seek legal advice before undergoing such an endeavor.

Source: Bankrate, "6 surprising facts about a living revocable trust," Judy Martel, accessed Oct. 15, 2016

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