- Avoids Probate. The probate process can be very expensive, often with a cost of 1 to 3% of the estate value. Also time delays can be between 6 months to over a year in some cases before the assets are finally distributed. In some cases if the deceased person owned property in more than one sate there can be multiple probates in each state, further complicating matters.
- Keeps the Estate Private. With or without a will, an estate is public record, and most people if they understood this would not want their estate information available to anyone. With a trust this is not the case, so a person’s entire estate is private.
- Provides for Conservatorship. By naming a successor trustee, it is very easy for that person to act in behalf of the Grantor for financial affairs. In some cases with just a Durable Power of Attorney document, some financial institutions will not always accept it. Also with the DPOA there may be some limitations that do not allow the agent to be able to do the things that the incapacitated person wants to do such as gifting. With a trust any financial institution generally always accepts the trust document naming the successor trustee position, and all of the activities the Grantor was doing before, can be performed by the appointed person.
- A Trust is Very Difficult to Contest. With a will it is very easy for a disgruntled beneficiary to contest the distribution, which can create unnecessary headaches for the remaining beneficiaries. There are no costs to do so and it is heard in probate court. With a trust for a beneficiary to challenge the distribution, they have to actually file a suit against the trust in a civil court of law, and there are substantial costs that are incurred.
- Protects Property for Remaining Beneficiaries. A very important feature that a trust can provide, is to hold assets in trust in the case of minor beneficiaries, or if one wishes to protect assets for spendthrift children, or to simply create a trust for a beneficiaries assets to remain within to provide creditor protection as well as sheltering assets in the case of a divorce.
As you can see the benefits of a revocable living trust are numerous and for most people it is the best choice for your estate planning options. If you haven’t set up a trust, or need to update your current trust, let us know as we have estate planning attorneys that we work with that can help you.