What is a Revocable Living Trust?
A Revocable Living Trust is a document that allows you to transfer title of assets during your life to a Trustee, typically yourself, for management. The ability of the Revocable Living Trust to bridge the gap between life and death is one of its more important features. As its name indicates, a Revocable Living Trust can be revoked in its entirety or amended in part by the Grantor (the person who established the trust).
What benefits does a Revocable Living Trust provide?
A Revocable Living Trust can provide the following benefits:
- Avoids the expense of probate - whereas with a probate administration, attorney's fees can be as much as 5% of the gross estate and executor's fees possibly up to another 5%, attorney's fees incurred in the administration of a Trust are typically minimal and can be non-existent as a trustee often times does not require the assistance of an attorney.
- Avoids the delay of probate - whereas the probate administration of an estate generally takes eight to twelve months, and often times more, a Trust that is designed to provide distribution of the Trust estate upon the death of the Grantor can be terminated in a minimal amount of time especially if the Trust does not own any real estate that must be sold.
- Avoids the publicity of probate - whereas Wills are filed with the probate court and therefore become public record available for anyone's viewing, a Trust is not recorded and remains confidential.
- Serves as a receptacle for estate assets.
- Avoids the forced sale of estate assets.
- Avoids estate administration in more than one jurisdiction - if an individual or couple owns real estate in more than one state, a Trust can provide the benefit of avoiding probate administration in both states which otherwise would be required if the real estate is owned by an individual.
- Avoids a Will contest. If a Trust is properly funded thereby allowing an individual's estate to avoid probate, the individual's Will would not need to be probated and, therefore, not subject to a Will contest. It is very difficult to successfully attack a Trust.
- Provides professional investment management, now or in the future.