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:

  1. 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.
  2. Revocable trusts are not exempt from estate tax. Revocable trusts are fully includable in the trust creator’s estate for estate tax purposes.
  3. 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.
  4. 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:

  1. 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.
  2. 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.
  3. 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.