When thinking about what you can accomplish with an estate plan, you may have some of the basics covered. You have a will which can distribute your property to who you want and also name a guardian for any of your minor children. You may have advance directives such as living will and a durable power of attorney for health care to protect your medical care wishes should you become incapacitated. These are important things to take advantage of when you are creating an estate plan. There are, in fact, other things you can accomplish with a comprehensive estate plan. For instance, have you considered a revocable trust? In addition to being a method of distributing assets to beneficiaries, a revocable trust has the added benefit of avoiding the time consuming and costly probate process. When creating your revocable trust, here are some clauses to include.
Clauses to Include in Your Revocable Trust
First of all, your revocable trust should have a clause clearly stating that the trust is, in fact, revocable and setting forth the terms of the trust. An appointment of trustee as well as an alternate trustee and successor trustee should also be made here. An alternate trustee will serve should your primary trustee selection be unwilling or otherwise unable to serve in this capacity. The successor trustee will take over managing the trust when the primary trustee steps down or is otherwise unable to continue serving in the trustee capacity. It is important to take care in selecting all of these individuals. The role of trustee is one of great responsibility and comes with an extensive list of duties.
Additionally, you should consider including a no-contest clause. It should first be said that trusts can be great because they are very difficult to contest in the first place, much tougher than contesting a will. Courts are very hesitant to take steps that might undermine or circumvent the true and original intent of a testator, the person who created a trust. Thus, a court will be extremely reluctant to hear a trust contest or grant a trust contest that has been brought. For an added layer of protection against a trust contest, a no-contest clause can be extremely effective as it states that anyone who brings a contest against the trust will waive their right to receive any benefits from the trust.
There is also the spendthrift clause to consider including in your revocable trust. A spendthrift clause provides protection against the poor spending habits or lack of money management skills of a trust beneficiary as well as protecting against beneficiary creditor claims. The spendthrift clause restricts beneficiary access to the trust. As the assets are technically owned by the trust and inaccessible by trust beneficiaries, creditors cannot go after trust assets to satisfy claims against trust beneficiaries. A spendthrift clause can also restrict distributions made to beneficiaries to help prevent a lump sum inheritance from being quickly spent through down to nothing.
Estate Planning Attorney
Are you interested in learning more about what a revocable trust can accomplish for you and your loved ones? Contact Monk Law today.