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The Law Offices of Samuel S. Reidy Blog

Wednesday, May 22, 2019

Benefits of a Revocable Trust

While it is true that Irrevocable Trusts provide more complete and far reaching protection for your assets, there are benefits to utilizing Revocable Trusts as well.  Many clients are spooked by the idea of an irrevocable trust, which takes away both your ownership and control over your assets in exchange for protection if you have to go into a nursing home.  Revocable trusts do not offer protection from nursing homes, but there are still benefits to utilizing them.

First and foremost, if your assets are held in a revocable trust, this avoids the probate process which will save your loved ones significant money when you pass away.  A properly drafted revocable trust promotes greater efficiency and a smooth transition of assets in the manner in which you would like your assets to transfer.  Revocable trusts also allow the grantor/settlor (i.e. the individual who owns the assets and is creating the trust) to retain full control over their assets, which is not something that is possible with irrevocable trusts. 

It should be noted that there are times when the probate process can be the best tool to protect a loved one's assets.  Specifically, assets held in a testamentary trust which is funded through the probate process are not counted towards Mass Health eligibility requirements for Medicaid benefits.  Simply put, if assets are passed through a revocable trust to a surviving spouse it may prevent eligibility for Medicaid, but if they are passed through probate via a testamentary trust, the assets will not prevent eligibility for Medicaid.  This issue will be dealt with more concretely in next month's post.

Additionally, it is much harder for a trust to be contested than it is for a will to be contested.  Contesting a trust is difficult and more expensive, which makes it a less attractive option for people who have felt wronged by a loved one's distributions. 

Distributing assets through a revocable trust is more private, as probating a will is a public form of dispersing assets.  Also, the court typically does not need to get involved in revocable trusts (whereas the court is directly involved with the will).  This typically uncomplicates the process of distributing a loved one's assets.

If you have any questions about estate planning or Trusts, please feel free to contact the Law Offices of Samuel S. Reidy for a free consultation.


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