New York basketball fans may have heard about a former University of North Carolina basketball coach who left $200 to each of the approximately 180 players he coached during his career. The coach used a revocable trust to distribute the funds.
The distribution came to public attention because a number of the players mentioned the North Carolina coach’s payouts on social media, but normally, a revocable living trust provides privacy that a will does not. This type of trust has other advantages as well. The person who sets up the trust remains in control of it, allowing them to dissolve the trust at any time if they have a change of heart or a change in their assets.
A revocable trust does not eliminate the need for a will. Assets that do not go into the trust must still be distributed with a will, and in some cases, an individual may set up a special type of will known as a “pour-over” will, which deals with all the assets that were not moved into the trust.
Revocable trusts may be expensive to set up and administer, so anyone considering them as an option may wish to weigh the advantages and disadvantages. However, in the right circumstances, a revocable trust can serve as the main estate planning document. For example, because the probate process that accompanies a will might be more expensive for some types of estates, a trust may be a better choice. An individual who is prominent in the community may also want the privacy provided by a trust.
Establishing and administering a trust can be complex, and an individual who is considering doing so may wish to consult an attorney. An attorney may also be able to assist in correctly preparing a will and other estate planning documents.
Source: Bloomberg, ” Dean Smith’s Generosity Got Lots of Press. His Estate Plan Deserves Some Too ,” Suzanne Woolley, March 27, 2015