Northeast Wisconsin
  • Northeast Wisconsin
  • May 2018
Written by 

Revocable trust

Trust: An unwavering reliance on the character, ability or strength of someone or something.

Revocable: Capable of being cancelled.

I’m sorry, what? You want me to put all my most valuable assets into something called “revocable trust”? So the lawyer marketing people had a bad day that day. But don’t let that discourage you from learning what a revocable trust is!

It’s approximately 1,327 percent better than its name would lead you to believe.

Explain it to me like I’m 5 years old please. Think of it like a special basket. This basket is created by an attorney for you to put assets in. When you die, the basket will be delivered directly to whomever you said it should go. But that’s why I have a will…

Three things to know:

  1. The legitimacy of a will must be verified by a court of law. This is called probate. Probate costs money.
  2. Probate takes a long time and can be very stressful for your loved ones.
  3. When a will is verified by a court of law, everything in your estate becomes public record. Trusts, on the other hand, are private.

OK. But what if I still need my assets after I put them in the basket? No problem. Most people do. With a revocable trust, you can still use your assets.

Isn’t this just for rich people? No, it isn’t. If you don’t want people knowing how much “stuff” you had after you die, a trust is what you need. Period. End of story. Privacy is a very legitimate, non-financial reason to own a trust. You are also doing your loved ones a big favor when you create a trust — it’s one last stressful thing they have to deal with after you are gone.

Do I own a trust? No. Why not? As of today, my estate is rather small. Avoiding the cost of probate doesn’t help my family out a whole lot. Privacy is not a concern of mine at this point in life. I just told you that my estate is small. So if I die tomorrow and you look up public records of my estate and find out that it’s small, I don’t really care.

OK, I get the privacy thing and I don’t want anything to be stressful for my family. But I’m still not convinced it’s right for me. If you’re looking for further rationalization that your estate is “big enough” to need a trust, try this:

Think about the value of your estate, minus anything that has a named beneficiary. Got it? OK, these would be “probate assets.” In the state of Wisconsin, probate generally costs 4 percent of “probate assets.”

So, for an estate that has $100,000 in “probate assets,” the probate process will cost roughly $4,000. Google tells us that the average cost of creating a trust is about $2,500 for married couples. Is it worth it for you to spend $2,500(ish) on a trust now in order to avoid ______ financial cost when you die, privacy to your estate and less stress for your family? Only you can decide that.

For me, right now, the answer is no. It’s not worth it. But I can also tell you that at some point down the road, the answer will be an emphatic yes.

A couple things to keep in mind:

  1. What I have done here is very rudimentary in nature. These are purely estimates to give you some sort of basis upon which you can start making your decision.
  2. In reality, the cost of a trust varies greatly based on the specific firm and attorney you are working with. In many cases, costs are based on the amount of time (billable hours) an attorney takes to draft your document.
Kelton Dopp

Kelton Dopp started his career as a Financial Advisor, prior to joining Epiphany Law’s team as a Project Specialist in 2017. One of his greatest passions in life is finding ways to make the complex simple. Epiphany Law, LLC. Is located at 4211 North Lightning Drive, Appleton. For more information, email [email protected] or call 920-996-0000.

 

Website: epiphanylaw.com
Subscribe Today
Community Partners Directory
Find a Complimentary Copy
Community Calendar