The Revocable Living Trust is an estate-planning tool.



Revocable living trusts come with advantages and a degree of work. Deciding if one is right for you can depend on your personal concerns and circumstances. One of the biggest differences in a Trust is based on contract law and governed you individually. A will “speaks” only at death and is regulated by the State under its probate code.

• Avoid Probate



• Assets held in a trust avoid probate because the trust itself does not die with its creator—called the Grantor or Trustmaker in legal terms. The trust remains up and running after the death of its grantor, and it can transfer its property to anyone the grantor has provided for in the trust’s formation documents, according to the grantor’s own terms. There is no need for court oversight or involvement.

• Probate avoidance is probably the greatest advantage of a revocable living trust particularly important considering if you own real estate in more than one state because your loved ones would be faced with two or more probate proceedings in this case if you just leave a will. Each property would have to be probated where it is located.

• A revocable living trust can also give your loved ones almost immediate access to cash during a difficult time. Your loved ones are typically unable to gain access to your bank account until a probate estate has been officially opened. Ask yourself how they will pay for funeral costs and other necessary expenses until this time.

• Opening a probate estate can take several weeks.

• Avoid Guardianship or Conservatorship

• Revocable living trusts are not just about death. They can allow your loved ones to avoid both a costly court-supervised guardianship if you become disabled as well as a costly court-supervised probate proceeding after you die.

• Your loved ones and your property would be subject to the restrictive rules of guardianship or conservatorship should you become incapacitated. Forming a revocable living trust involves naming a successor trustee, someone to step in and manage the trust for you if a time comes when you are no longer able to tend to your personal affairs yourself.

• Your successor trustee can take control of your trust assets without the interference of the court after following your trust’s provisions for determining your incapacity.

• Your trust’s provisions are yourprovisions—you establish them when you create the trust.

• Keep Things Private

• Probate is a public proceeding. Anyone can go to the courthouse and look at each document filed there, including your will. Strangers can even look up court dockets and filings online in some states. Anyone can see the extent of what you owned to leave to others, and they can find out who got what when probate is opened, and your will is placed with the court.

• Trust documents are never filed with a court, so they do not become a public record.
  

• Funding a trust involves work with a financial advisor and your attorney.



• You must create new deeds and other documents to transfer ownership of your assets into the trust after you form it. You will have to contact your bank, investment and insurance companies, and transfer agents. You will have to change account and stock ownership and update beneficiaries. New stock certificates must be issued. Cars and boats must be retitled.

• You will need a special type of will called a pour-over will “catch” your unfunded assets in this case. The will “pours” them into your trust at the time of your death, as the name suggests. Your pour-over will must be probated, but it can still be an invaluable worst-case-scenario backup tool.

• Additionally, some assets cannot be owned by the Trust. This includes certain retirement plans and assets you might hold jointly with someone else. For example, you cannot transfer ownership of your half of a house to your trust if you own it as a joint tenant. You will need an alternate means of moving ownership of these assets, but you can still avoid probate if you make use of beneficiary designations.