Personal Property trusts are primarily used by property investors prone to liability through work or personal matters. Titles and deeds are accessible with a few clicks of the mouse. Such trusts are often used for personal residences as rental properties should go into an LLC.
Keeps your name off the public record, and stops fortune hunters from finding you.
Save time, money and your privacy. Your heirs will be grateful.
Less expensive than one lawsuit or probate proceeding.
A second benefit to using a personal property trust is it may double as revocable living trust. If there is no will or trust, then assets are probated or distributed by statute. Probate has the following downsides: Everything goes into the public record, it costs several percent of GROSS asset value, and takes many months.
1. You can put more in than you think. From homes to stocks and financial accounts.
2. Transfers aren't Taxable. There are no tax consequences for transfers into a revocable trust! The property still belongs to you.
3. Cars or Mobile Homes. DMV records are open. Placing the title of your vehicle in the name of a trustee keeps these holdings private.
4. Wills. Many people wish to avoid the time, expense and publicity of probate. Trust assets bypass probate and are distributed per your instructions.
Not all assets require probating. Life insurance, annuities, certificates of deposit ("CD"), savings accounts, and the like are generally exempt. For example, a life insurance policy is nothing more than a contract that requires you to pay a monthly premium; in exchange, you receive the insurance company's promise to pay the insurance proceeds to those you named as beneficiaries.
The advantage of the trust is that if you make your trust the beneficiary on all your "contractual agreements" like life insurance, any time you want to make a change in the disposition of your estate, you only need to make the changes in one document, the trust. No longer do you need to contact, or notify insurance agents, estate planners, or bankers of desired changes in your estate plan.
Having a revocable trust does not affect buying or selling assets. The only change is titles should be in the name of the trust. Assets titled properly are considered a trust asset and will be distributed according to the terms of your trust. If you do not want an asset then you are free to sell or give it away. Your control over the assets is not restricted in any way.
Making Changes: Changes to a revocable trust only require writing an amendment to the original trust document. While it is simple to make changes, it is also important to discuss such changes with competent legal counsel.
If you become incapacitated, your successor trustee manages your affairs according to the trust.
There are few disadvantages to the revocable trust. The largest is the time to re-title your assets. Any "titled assets" not modified to reflect the trust as the beneficiary, or owner, will be subject to probate. There is also a "myth" circulating that suggests a revocable trust will save you taxes. There are no tax savings in utilizing a revocable trust. The federal estate tax laws (and the inheritance or estate tax laws of most states), provide that any assets over which a person has the right to revoke and claim as their own (such as in a revocable trust) are included in the gross taxable estate.