Planning for when you become old and/or incapacitated is not the merriest thing you’ll ever do, but it’s an important part of any long-term financial strategy. One option is to set up a living revocable trust, which is a legal document that lets you change the terms of the trust or revoke it entirely at any time while you are alive. Financial expert Suze Orman is a big champion of living revocable trusts, saying on a recent podcast that “there is no downside” to having one.
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On the “Suze Orman’s Women & Money” podcast that aired on July 11, Orman responded to a caller whose attorney advised that there is no reason to get a living revocable trust. The attorney recommended using probate instead. The American Bar Association defines probate as the formal legal process that recognizes a deceased individual’s will and appoints a personal representative to administer the estate and distribute assets to beneficiaries.
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Orman was quick to defend living revocable trusts in her response to the caller.
“There is no downside of having a living revocable trust. There are many, many upsides to it,” she said. “You say you have a power of attorney that allows your beneficiaries, if you become incapacitated, to buy or sell real estate. Who cares about the real estate? I care about who’s going to manage your money. Who’s making those decisions? Who is going to write your checks for you?”
Orman’s support for living revocable trusts is well documented. In a blog post published last year, Orman wrote that having a revocable trust in place is “one of the most important things you can do to protect yourself and your family.” She especially recommended setting one up when you get married, buy a home, start a business or have a baby.
Among the advantages she named were financial protection if you become disabled, the ability to avoid probate court and the flexibility to modify the trust terms at any time.
In a blog post about revocable living trusts, the Teachers Insurance and Annuity Association of America echoed some of those benefits and added the ability to keep your assets private with a living revocable trust. In contrast, in probate, your will and assets are “usually available to the public.”
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This article originally appeared on GOBankingRates.com: Suze Orman Says There’s No Downside to Having a Living Revocable Trust
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