The first segment of our living trust series explained the concept of a revocable trust.
Now, let’s talk about the advantages of having a trust as part of your estate plan. The following is a list of the most significant benefits:
Assets placed in a trust are not subject to the probate proceedings and thereby avoid the expenses and delays of probate. The typical probate process usually lasts well over a year, and can be very costly due to the statutory fee structure. The probate fees payable to the attorney probating the estate and the personal representative named in a will are avoided by utilizing a living trust.
Minimizes Emotional Stress on the Family.
Probate proceeding is not a pleasant experience. It can cause a great deal of emotional stress on the family who has just experienced the loss of someone they love. Because a living trust results in an organized and timely distribution of assets, the strain is greatly reduced.
Without a revocable living trust, a personal representative of the estate is required to file the will with the probate court and report the details of the estate administration to the court. Hence, the administration of a person’s property would become a matter of public record, including what assets the person owns and to whom he or she left their belongings. Because the living trust is not required to be filed with any court and because its administration is need not be reported to any government authority, use of the revocable trust avoids the undesired publicity.
A living trust allows a person to name who he or she wants to administer the trust assets in the event of disability. Without a living trust, a guardian or conservator would have to be appointed by the court to manage the person’s property. A living trust helps to avoid the expense, delay, and restrictions of the court supervised conservatorship.
Provides Complete Flexibility in that it can be changed, altered, canceled, or revoked at any time prior to the person’s passing away.
Provides Complete Control.
Assets transferred to a revocable trust continue to be controlled by the person who created the trust.
Revocable Trust Allows for Continuity of Investment and Management.
Use of a living trust can provide for continuity of investment and management of assets even after a person’s death. This advantage may be important where the person’s children or other beneficiaries are unable or unwilling to adequately mange the assets themselves.
Aside of the probate and family considerations, a revocable trust also has significant tax and legal advantages, which we will discuss in detail in the continuation of this post.
To be Continued in Advantages of A Living Trust: Part 2.