The Revocable or Living Trust is currently very popular among elderly clients and their attorneys. Many clients believe that the Revocable Trust will work to reduce or eliminate estate tax. Others are under the impression that the Revocable Trust will protect assets in the case of nursing home placement. Still others think that if they have a Revocable Trust, there is no need for them to also have a Will. It is important that your attorney be able to address each of the above misconceptions particularly when reviewing existing Revocable Trusts prepared by other attorneys.
The advantages of using a Revocable Trust include: Avoiding probate; Maintaining privacy; Avoiding ancillary probate; Avoiding Will contests; Quick disposition; and Asset management.
Irrevocable trusts are used for a myriad of purposes, although they are mostly tax related. Many times a single type of irrevocable trust can be used for a variety of different tax purposes. Irrevocable trusts are also a valuable tool for purposes of Medicaid planning. When properly drafted and administered, irrevocable trusts protect assets while permitting the beneficiary to obtain and maintain qualification for public benefits.