Pros of Revocable Trusts in Hawai‘i
A revocable trust is a trust that allows the trustor to change its terms, or even revoke it in full, while the trustor is alive. Once the trustor passes away, the trust is distributed by a trustee according to its terms. It is a way for a person to manage and control their assets while they are living and have those assets pass to their loved ones when they die.
Probate Avoidance
The ability to avoid probate is the main reason consider placing assets in a revocable trust. Probate is the process where a decedent’s estate is administered through the court system. It can be a tedious and time-consuming procedure. Assets placed in a revocable trust. Probate is the process where a decedent’s estate is administered through the court system. It can be a tedious and time-consuming procedure. Assets placed in a revocable trust typically do not have to go through this court-supervised process.
Flexibility
While there are other types of trusts, the revocable trust remains a popular choice due to its flexibility. The creator of the trust is able to make changes to the trust up until the time of their death.
Incapacity Protection
A trust provides protection in case of testator incapacity. In other words, if the person that creates the trust later becomes incapacitated (develops dementia, for example), a new or successor trustee can take over the management of the trust. They will also be required to administer to trust according to its terms.
Privacy
If maintaining privacy over your assets is important to you, a revocable trust in an option worth considering. Assets placed in the trust are administered to beneficiaries privately, unlikely assets administered through the probate process, which is public.
Cons of Revocable Trusts in Hawai‘i
There are some disadvantages to revocable trusts. Below are brief descriptions of the most common disadvantages, which must be weighed against the advantages and our specific needs.
Time and Money
Going through the process of setting up a revocable trust can take significantly more time and money than simply executing a Will. It requires that the trust be funded by changing deeds, titles, and other documents to transfer into the fund.
Lack of Asset Protection
Some trust types shield assets from the reach of creditors and judgments. A revocable trust, however, does not provide this protection, and assets are still within the reach of creditors.
Terminating a Revocable Trust in Hawai‘i
The good news, and the reason most people choose to use a revocable trust, is that the trustor retains the right to terminate it when they choose to do so. The steps you need to take to terminate the trust vary by jurisdiction and the terms of the trust.
Typically, you need to execute a trust revocation and “defund” the trust, which means removing the assets placed into it. This may involve re-issuing titles, deeds, and other documents out of the name of the trust.
Contact a Revocable Trust Lawyer in Maui Today
A revocable trust can offer many benefits. They can be used as a way to protect you assets and help family members or other individuals or organizations for which you care a lot. To find if a removable trust is right for you, and if so, which type of revocable trust best aligns with your interests, contact our estate planning attorney in Hawai‘i by using the online form or calling us directly at 808-865-2100. We will schedule a consultation, at which time we will listen to what your wishes and concerns are and develop a customized estate plan that works for you.