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A revocable trust is a useful estate planning benefit with a variety of potential benefits. Not only can it work to avoid the time consuming and expensive probate process, but it can also help you avoid guardianship court as well as provide asset protection for your beneficiaries and protection for beneficiaries with special needs. Furthermore, it can give you control over how your assets are spent by beneficiaries even after you have long since passed away. Because of these benefits, a revocable trust can be a valuable addition to many estate plans. If you are considering establishing a revocable trust, there are some specific clauses you should think about including.

What Clauses Should You Include in a Revocable Trust?

There are certain clauses that should be included, or that should be at least put under consideration for inclusion, in a revocable trust. For instance, trust documents should state that the trust is in fact revocable just so that is made up front and clear. There should also be a designation of a trusted individual or entity to serve as trustee of the trust. It is usually good practice to also name a successor trustee that will serve in the event the originally appointed trustee is either unwilling or unable to serve in capacity of trustee. The terms of the trust should also be clearly set forth within the revocable trust documents.

Many with revocable trusts choose to include a spendthrift clause and do so with good reason. A spendthrift clause can provide a strong layer of protection between trust beneficiary creditors and trust beneficiaries themselves. You see, through the use of a spendthrift clause, you can provide financial support to your beneficiaries while at the same time protecting those financial resources from creditors and poor spending habits. This is because a spendthrift clause keeps the money in the trust as opposed to distributing the funds to the personal accounts of the beneficiaries, where it is left vulnerable to creditor claims and bad spending habits. For those younger beneficiaries or those with trouble managing their money, a spendthrift trust can help them handle an inheritance you wish to leave them instead of leaving a lump sum which could quickly dissipate.

You may also want to consider including a no contest provision in your revocable trust. Such a provision provides that anyone who challenges the validity of the trust or your intent as expressed in the trust will, in turn, receive nothing from the trust. Revocable trusts already have built in deterrents against those contesting trust validity. In fact, these estate planning tools are very difficult and very expensive to contest. A no contest provision, however, provides an extra layer of protection against contests.

Your revocable trust should also include a designation as to who will be income beneficiaries and who will be principal beneficiaries of the trust. In many cases, these are different sets of people. It is common, for instance, for a trust to designate a spouse as an income beneficiary and not a principal beneficiary. While the spouse receives distributions from income-producing property held in the trust, such as rental property, the principal is held for other beneficiaries, usually children, that will be paid out upon the death of the surviving spouse.

Florida Estate Planning Attorney

If you are interested in establishing a revocable trust, Verras Law can help. Contact Verras Law today.