Benefits of a Revocable Living Trust
Many people now choose a revocable living trust instead of relying on a stand-alone will, beneficiary designations, or joint ownership in their estate planning. A living trust that has been properly prepared and funded with your assets can provide many benefits for you and your loved ones.
How many of these benefits of a revocable living trust are you familiar with? A living trust:
- Avoids the time and expense of probating the assets held by your trust when you die
- Avoids multiple probates if you own real estate assets in more than one state
- Provides easier, more efficient administration of your estate
- Prevents court interference at incapacity and after your death
- Gives you and your family maximum privacy by avoiding public court processes
- Minimizes emotional stress on your family
- Brings all of your assets into one plan controlled by one set of instructions
- Prevents unintentional disinheriting
- Makes it easier to make equitable (fair) distributions to your beneficiaries
- Lets you keep assets in the trust until your beneficiaries reach the ages at which you want them to inherit
- Can continue longer to provide for a loved one with special needs
- Enables assets to remain in the trust and be protected from beneficiaries’ creditors, spouses, divorce proceedings, irresponsible spending, and future death taxes
- Prevents the court from controlling the inheritance of minor children
- More difficult than a will to contest
- Provides effective prenuptial protection
- Can be changed or canceled at any time while you are competent and alive
- Allows for professional asset management if you choose to have a professional trustee
- Can include tax planning to reduce or eliminate state and federal estate taxes
- Lets you keep maximum control while you are living (even if incapacitated) and after you pass on
- Provides peace of mind
It will probably cost more initially to set up a well-drafted living trust than to have just a stand-alone will prepared. One reason is that a living trust usually has more provisions because it deals with issues while you are living as well as after you pass on, while a will only deals with issues after you pass on. When comparing costs, remember that the true cost of a will must include the costs of probate when you pass on, a possible conservatorship if you become incapacitated, and a guardianship if you leave assets to minor children.
After weighing the costs and benefits, it is easy to see why so many people and professionals prefer a living trust.