Revocable Trusts provide a host of benefits to the beneficiaries of a deceased loved one. Probate is avoided and administration is less cumbersome. These are nice benefits of a revocable trust; however, some clients feel that these benefits do not outweigh the cost of setting up an estate plan with a revocable trust.
A circumstance that make a revocable trust really needed is when the individuals have minor children and there are substantial assets that will pass to the children upon the death of the parents.
If the couple only have Wills, there is no ability to put strings or conditions on money left to children. If the children are minors, the Court will appoint a Guardian and Conservator to care for the children and their assets. When the children attain the age of 18, they will receive whatever principal is left. There will be no conditions on how the money is to be spent. The child might decide to use it to further his or her education; however, alternatively, it might be used for a sports car.
A revocable trust enables the grantor to put strings on money given to the children and to hold the money in trust for a longer period of time. The money remains in trust and might only be available for college costs until the age of 22 or 23. The distribution of the principal left at that point might staggered so that the child receives lump sums at 22, 25 and 27.