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.