Everyone should have the basic documents to protect themselves and their family from the clutches of probate. However, you may also need to have a revocable living trust.
A Living Trust is a collection of documents and instruments that keep your assets from going to probate. Instruments can include setting up a land trust, Limited Liability Corporation, etc.
A revocable living trust is one of many types of trusts. The “living” aspect refers to the fact that the trust is created while you’re still alive (as opposed to a testamentary trust). “Revocable” designates the trust as one that you, the grantor, can change as desired (unlike irrevocable trusts). You still control the assets until you die even though, technically speaking, the trust owns them.
So Why Would You Need a Revocable Living Trust?
-1- Avoiding Probate: Once you have setup and funded your living trust, assets in your trust are passed to your beneficiaries without going through the probate process; including if property owned by the trust is in another state.
A living trust allows your estate to be settled quickly. But there’s an important caveat: To successfully avoid probate, all relevant assets must be re-titled in the trust’s name, transferring ownership to the trust.
-2- Maintain Your Privacy: The terms of a trust are private, whereas wills become part of the public probate record. Probate is a public process where all information submitted and litigated is available for anyone to review.
-3- Make Sure Your Assets Go to the Intended Person(s): A trust prevents assets from being redirected. Assets in the trust are distributed in according with the language of the trust. Assets cannot be redirected by probate court, state law; or by a surviving spouse’s new partner.
-4- Better Legal Protection: Trusts are more likely to withstand legal challenges than wills; however, trusts are not bulletproof.
-5- Less Cost to Your Beneficiaries: Since trusts avoid probate, the costs of administering the estate are often significantly lower than with a will. Of course if you have family disputes, probate court costs can skyrocket.
Should you decide to setup a living trust, we recommend that you talk with an estate attorney to make sure everything is property drafted, recorded and funded.
