Why You Would Create a Revocable Trust 

Revocable trusts are usually created to do a couple different things: they create more privacy than you will have in probate; they can avoid probate and can help simplify and streamline the process of transferring assets, particularly if you have a complicated estate or things that are outside of Ohio. They can avoid ancillary probates in every State that you hold an asset in, and they can help create a very easy management system for a trustee if you become incapacitated. So it will kind of almost double a power of attorney because you will have a Trustee and your assets will be in the Trust.

If you become incapacitated, there will be provisions in the Trust as well that will specify how you want things handled and by whom.

A Revocable Trust will give you the ability to have a little more control when you pass away. So it's not only going to avoid probate, but it can have some provisions in there setting up additional trusts for family members. So, you can do more than you would if you only have a will.

For example, you can live a certain amount of money to one of your children and, if they get divorced, the money in the Trust will not be shared with the marital assets, and creditors cannot come after that money. You might direct how the money should be spent, in monthly allowances or at a certain age.

In Case Of Divorce 

In a divorce in Ohio, a spouse doesn't have the right to your inherited property if it's yours, or your separate property. It is however very, very easy to comingle assets when you live with your partner and, once you start comingling, it gets more complicated to prove that those are separate assets. If it's held in a trust, it will be very simple. Your partner will not be able to touch it, and creditors can't get either. So, you can create creditor protections for children and grandchildren that you could not create very easily for yourself.

A Trust will also allow you to determine who will handle your money, should you pass and not want your ex-spouse to make such decisions on your behalf.

The Flexibility of a Revocable Trust 

In a Revocable Trust, you can move things in and out of the Trust, the Trust can go away at any time, you can dissolve the Trust, you can change the Trust, you can put assets in, you can take assets out, but you're not going to have any creditor protection because if you can reach into the Trust, so can anybody else.

When you die, that Trust will become irrevocable. This is not going to be a Revocable Trust because you were the one to create it, and you can no longer modify it.  

Tax Issues

In a Revocable Trust, you're not creating any tax issues because your assets are technically still in your name. Everything stays under your social security number or under your taxes, so you're not going to be paying any extra taxes for that Trust. In an Irrevocable Trust, because you're creating this separate entity, it is going to create tax ramifications that could be harmful because the trust tax rates could be different and are often higher than they would be for an individual. 






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