From Our “Ask a Question” Mailbag: “Who should get a revocable living trust?”
Peter Klenk, Estate Planning Lawyer.
What is a Revocable Living Trust?
Revocable Living Trusts are not for everyone. These unique tools are excellent for some people but not much use to others. For whom are Revocable Trusts useful?
First, what is a Revocable Trust? A “Revocable Living Trust” is a legal entity that your signature brings into existence. You can be the Grantor, the Trustee, and the Beneficiary. Uniquely, they can be “revoked” quickly, and all assets returned to you. Once signed, the trust exits with whatever terms you have included. Some Revocable Trusts are a few pages long, while others are more than 50 pages long. The trust can own just about any assets. Typical assets found in Revocable Trusts include real estate, bank accounts, publicly held stocks, and closely held company stocks.
Who Should Get a Revocable Living Trust?
People Who Live in States Where Probate is Expensive.
The most common reason cited for forming a Revocable Trust is that it is a Will substitute. When properly drafted, funded, and maintained, a Revocable Trust allows your assets to pass outside of the probate process. In some estates, this has great value. The probate process of California, New York, and Florida have a reputation for being long and expensive. A Revocable Trusts’ up-front costs can help avoid a much higher probate cost later on.
People Whose Executor Lives Far Away.
Though less of a factor than it once was, should your executor live far from your state, a Revocable Trust can make their work much more manageable. Your executor must file your will with the state. Further, there are specific required steps. The distance can make these steps more difficult. This is even truer if your executor lives overseas.
A Revocable Trust names a successor trustee. At your death, your successor takes over. They don’t need to file with the county, like an executor. A Revocable Trust, in certain circumstances, can speed up the process.
People with Real Estate in More Than One State.
States jealously guard their rights to oversee the real estate located within their borders. This oversight means that if you have real estate in several states, your executor will have to utilize the probate process in each state where you own real estate. Filing the will in the various states is called ancillary probate. This process can be time-consuming and expensive, depending on what states are involved. A Revocable Trust, though, can avoid this process. If you place each deed into the trust, then at your death, the successor trustee has immediate control. There is no need for ancillary probate.
People with Alzheimer’s.
A Revocable Trust can prove useful if you have Alzheimer’s, or other age-related ailments. You can name a co-trustee with the power to manage trust assets without independently from yourself. In this way, you can manage assets while you are able. But, when you are not, the successor trustee seamlessly takes over.
Revocable Trusts are useful tools for many people. But, they are not a good fit for many other people. Use this tool only if it is helpful to you. Start your process by reviewing the pros and cons given your situation when considering my article, Revocable Living Trust: Everything You Need to Know.
In Conclusion: Who Should Get a Revocable Living Trust?
I hope you found helpful this short article addressing the question, Who Should Get a Revocable Living Trust? I have also included some links for more detailed information. If you are curious about Probate, Estate Planning, or other various planning techniques, contact us. Let our Estate Planning lawyers help walk you through what can be a confusing process. In fact, feel free to contact our office for a free consultation.
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