Hudson Valley
Estate Planning
Secure Your Legend
Revocable Trust Mythbusting
Many individuals approach Hudson Valley Estate Planning seeking to establish a revocable trust, but have certain misconceptions about what a revocable trust does and does not do for their estate plan. Here’s what you need to know:
- Revocable trusts will not always save heirs money. Many individuals seek to establish a revocable trust in place of a will to avoid probate. In some cases, however, probate costs are roughly equal to the cost–both in time and money–of establishing and funding a revocable trust.
- Revocable trusts are not exempt from estate tax. Revocable trusts are fully includable in the trust creator’s estate for estate tax purposes.
- Revocable trust assets are not shielded from the trust creator’s creditors. Revocable trust assets can be seized to satisfy the debts of the trust’s creator.
- Revocable trust assets are not excluded from Medicaid eligibility calculations. Revocable trust assets are counted as a resource available to the trust’s creator when he or she seeks Medicaid nursing home care or in-home care coverage.
Despite these facts, there remain powerful reasons to establish a revocable trust, including:
- Avoiding family legal strife. A revocable trust can exempt property from probate, which is helpful if there is a fear that the probate process could be disrupted by disgruntled family members.
- Preserving an individual’s financial privacy. Assets in a revocable trust will not be disclosed in a probate proceeding, as those assets will avoid probate.
- Easing the transfer of ownership of out-of-state property. If out-of-state property is placed in a revocable trust, it will not be subject to a probate proceeding in that state when the trust’s creator passes on.
Book your free consultation today to learn how Hudson Valley Estate Planning can help you secure your legend through a revocable trust.
