Thinking about your family if you die or become disabled is not always at the top of our to-do lists. However, planning for this now can save your family lots of stress if they find themselves in this situation.
One way to protect your family is to create a revocable trust as part of your estate plan. Keep reading to learn more about a revocable trust and whether this estate planning tool might be right for you.
1. What is a Revocable Trust?
A revocable trust is a written legal document that creates a separate entity (the trust) that holds property. The trust then designates someone (the trustee). The trustee is responsible for managing the trust’s property for the benefit of others (the beneficiaries).
You create the trust, often with the help of a qualified Wisconsin trust lawyer. Here, you would be referred to as the “grantor” or “settlor.”
It’s revocable because you can change its terms, as long as you’re alive and legally competent. You don’t need anyone’s permission to make these changes.
In Wisconsin, trusts are revocable unless they are specifically designated as “irrevocable.”
2. Who Can Be the Trustee?
Under Wisconsin law, any legal competent person over the age of 18 can serve as trustee. In fact, you may even name yourself or yourself and your spouse, giving you full control of the trust’s property while you’re alive.
However, you may also choose a family member or trusted friend, depending on your situation.
You should also consider naming a successor trustee, in case the individual trustee you chose dies or otherwise becomes incapacitated.
3. Who Can Be the Beneficiary?
For revocable trusts, you typically name yourself as the primary beneficiary. If you’re married, you might choose to name both you and your spouse as the primary beneficiaries.
You then may choose a beneficiary for after you (and your spouse, if applicable) die. The trust may continue after your death to hold property for a minor beneficiary or another beneficiary that may not be able to manage its assets.
4. What Can a Revocable Trust Do?
A revocable trust can:
- Provide financial management of your assets
- Provide management of your property if you’re no longer can
- Provide for your minor children if you die
- Avoid probate
- Distribute your asets expeditiously
5. What Can a Revocable Trust Not Do?
A revocable trust cannot:
- Save you on income taxes as the government views any income earned by the trust as taxable income
- Reduce your estate or other death taxes as the property in your trust (at your death) will be considered part of your estate
- Protect you against creditor’s claims after you die
- Eliminate all probate costs, such as hiring someone to prepare the trust’s final tax return
- Eliminate your need for a will
- Eliminate your need for a healthcare power of attorney
Trusts and other estate planning tools can often seem daunting, but with an experienced Wisconsin estate planning attorney on your side, you can amply plan for your and your family’s future.
Setting Up a Trust in Southeastern WI
If you need a trust in Southeastern Wisconsin and the Milwaukee area, then you can count on the estate planning experts at Collins Law. We have years of experience planning estates, and we can help you navigate your options, including setting up a trust. Contact us for a free consultation today!