Downsides of a Revocable Trust
From Our “Ask a Question” Mailbag: “I have read about all the advantages of a Revocable Living Trust, but what are the Downsides of a Revocable Trust?”
Revocable Living Trust Attorney Daniella Horn
Are There Any Downsides of a Revocable Trust?
In many blogs and articles I have expanded upon the many positive aspects of a Revocable Trust, but let’s take time to talk about the Downsides of a Revocable Trust.
There are not many, but they do exist.
Cost of Creating a Revocable Trust
A Revocable Trust does decrease the cost and amount of work needed at your death. Your family will thank you for taking the time (and spending the money) to set it up. However, creating a Revocable Trust costs more than using a traditional Will strategy. This cost is usually not significant. In my practice, it usually is about an additional $500 or so for document drafting with a revocable trust vs. a will plan.
However, there are also the costs of moving deeds into the trust, which can range from $800.00 to $1,000.00 per deed, depending on the county filing fees.
Conclusion: While there are additional costs, they are minimal, and by avoiding the filing fees at death that are required if you use a Will strategy, the family does save money.
More Work for You While You Are Alive
Once your Revocable Trust is created, it must be funded. Typically, the attorney will draft deeds moving your real estate into the trust and your CPA will help you with moving in LLCs. If you have a financial planner, she can help you with either moving your investment accounts into the trust or updating the beneficiary desiginatons to name the revocable trust.
Conclusion: Some homework must be done after forming your Revocable Trust. None of these steps is especially difficult; most can be done by yourself. Are you a person who puts off tasks? Your professional team can take the steps for your.
No Protection From Liability
This isn’t a downside to Revocable Trusts, but rather a fact that should be recognized. Because you maintain control over the trust assets, you remain the beneficiary, free to use the assets, and you retain the right to revoke the trust and take all the assets back into your name; the trust provides no shelter from creditors or divorce.
Revocable Living Trusts are tools meant to avoid probate and make the process of your death easier and cheaper. They are not designed to protect you from your creditors. However, the trusts can include trusts that protect the assets from your descendants’ creditors at your death. So, once you die, those daughter-in-laws cannot access your son’s inheritance.
In Conclusion, Downsides of a Revocable Trust.
The conclusion is that while there are downsides to a revocable trust, they are far outweighed by the upsides.
If you want to know more, please follow this link to my article, Revocable Living Trusts: Everything You Need to Know.
I hope you found this short article about the Downsides of a Revocable Trust. Contact us if you want to know more or have an estate that needs our help. Let our Probate and Estate Planning lawyers help walk you through what can be a confusing process. Feel free to contact our office for a free consultation. It’s All We Do:
Wills, Trusts, Probate, and Estate Litigation!
It’s What We Do!
Peter Klenk, Esq. Pennsylvania Revocable Trust Lawyer, New Jersey Revocable Trust Attorney
