Prior to 2011, Revocable Trusts were a common tool used by Wisconsin Estate Planning Attorney’s for many reasons but arguably most often as a tool to avoid having to have clients pay estate tax. I have included a chart from Wikipedia showing the breakdown of the Federal Estate Tax as it has progressed through the past fourteen years.
The common use of the Revocable Trust was to allow for a tax credit shelter to protect the surviving spouse but still allow the ability to draw income and principle from the trust for his/her lifetime. Now, the estate tax is over 5 million dollars. This also does not address the issue of portability. Portability means that when one spouse dies the surviving spouse can use any unused estate tax credit from the deceased spouse. This may mean that the surviving spouse can have a credit up to 10.5 million dollars.
Which brings mean back to the question, is there a need for a Revocable Trust if your clients do not have an estate worth 10.5 million dollars. The answer is yes. I use Revocable Trusts when a client owns property in another state. This will ensure that the client does not have to open an probate in that state. I am sure that the Trust will find other uses, but in my opinion it is second when it comes to the Irrevocable Trust.