Four major advantages are present with a revocable trust. First, the trust is private. In nearly all cases, the trust property and the trust provisions will be handled by the trust administrator and only a few advisors and family members usually are aware of these provisions. This privacy is very much appreciated by those who do not wish to have their personal affairs be made a matter of public record.
Second, there can be provisions for medical care. If you are unable to manage your property, a successor trustee can take over management of the assets and use the income and principal of the trust to pay for your medical care.
Third, this trust does avoid the probate process. Although there is some cost in establishing the trust and operating it, there are offsetting savings since you will not be required to pay some of the fees which are normally due from the estate through the probate process. Please note that this does not mean that you now will avoid all federal estate tax. These trusts are, indeed, part of the taxable estate and will be subject to federal estate tax. However, they will bypass the probate process and the trust principal and income will be distributed to those beneficiaries as indicated in the trust document.
Fourth, this trust is very beneficial for managing assets. Senior persons may be subject to illnesses that could make it difficult for them to manage the property. In this circumstance, a successor trustee who has been selected by that senior person can take over the management of the property and insure that everything is done correctly to preserve the value of the property and see that the correct amount of income is received. This management provision is a great comfort to senior friends who have revocable trusts.
Why should not everyone have a revocable trust? Well, some people think that everyone should. However, there is some expense involved in setting up the trust and for that reason, most of the people with revocable trusts are typically more senior friends with substantial estates for whom the additional expense is very worthwhile.