The 4 Key Benefits of a Revocable Living Trust

When most people think of a legal document that will distribute their assets upon their death, the first item that comes to mind is a will. However, a will is not the only document that can accomplish this goal. Trusts can allow you to distribute your property to your beneficiaries in a much more economical and efficient manner in many circumstances.

What Is a Revocable Living Trust?

A trust is a legal document that indicates how your property will be administered to specific beneficiaries of your choosing. A living trust is sometimes referred to as an “Inter Vivos” or “revocable” trust, but they all have the same meaning.

A living trust allows you to use and maintain your own assets while you are alive, and then this estate planning tool morphs into a vehicle by which you can distribute your assets after your death to the people you designate. Someone of your choosing administers the assets; this person is referred to as the “successor trustee.”

Benefits to Using a Living Trust

  1. Avoid Probate

Perhaps the most well-known and important benefit of a living trust is that you can avoid probate for specific assets by using it. If you use a will alone, all of your assets must be probated, which can take a significant amount of time—sometimes years. In contrast, administering property in a trust may only take several weeks.

This benefit is of particular importance for those who may have assets in more than one state. In those situations, if the property is not a trust, the will must be probated in each state individually. Obviously, this process can be extremely cumbersome and time-consuming.

  1. Save Money

While living trusts are a little more involved to establish up front, it can save your loved ones money after your death. Living trusts are more likely to hold up in court if they are contested, which can save significant funds if there is a potential dispute regarding the distribution of property. There are also no court costs that must be considered as there would be if you had to probate a will.

Although the tax savings between a will and a living trust are generally not significant, there may be some tax benefits for married couples who establish joint living trusts.

  1. Privacy

Privacy is an important issue for many individuals and families. Administering assets through the probate process is a public endeavor. That means that anyone can have access to information about your estate if they ask. However, trusts are private, which means only those who are involved in the trust’s administration will have knowledge of its contents.

  1. Administration If You Become Incapacitated

The successor trustee can step in if you become incapacitated or unable to handle your affairs. This is an often overlooked benefit, but it is an important one. Your successor trustee can completely take over your day-to-day obligations without court intervention if you need it. In this respect, a living trust is similar to a durable power of attorney.

Creating a strong revocable living trust is important to avoid disputes down the road. Legacy Planning Law Group can help you use this estate planning tool in the most effective means possible for your situation. Contact our team for more information.

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Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.