What are the benefits of using a revocable living trust?
Revocable living trusts have become increasingly popular in recent years, and for good reason. This type of trust offers several financial advantages when passing your assets down to your heirs. For those just starting out on the estate planning process, you may be wondering whether you should consider making a revocable living trust along with your traditional will. Our California trust and estate planning attorneys discuss the pros and cons of revocable living trusts below.
The Benefits of a Revocable Living Trust
Revocable living trusts offer several advantages over a Last Will and Testament. First, your trust will allow your assets to avoid probate. With just a will in place, your assets must be distributed through the court process called probate. It can be a lengthy and expensive process, often subjecting your assets to fees and taxes. A living trust, on the other hand, will allow your assets to immediately pass to your heirs without the need of probate because the assets are already held in the trust.
Another benefit to a revocable living trust is the privacy it provides. Probate is a pubic proceeding, allowing anyone who is interested to enter the courthouse and look for the probate files kept there. At times, some records will also be visible online. Your revocable living trust, on the other hand, will not need to be filed in court and will never become open to the public.
The Drawbacks of a Revocable Living Trust
Despite the numerous benefits of a revocable living trust, there are a few drawbacks to consider. First, the cost to create a revocable living trust will generally be higher than a will in the short-term. This can turn some people away from a trust. However, when you consider total costs overtime, a trust will actually cost you less than a Last Will and Testament alone because it will allow your assets to avoid probate.
Additionally, it will take some time and effort to fund your trust. You will need to transfer ownership of all assets you desire into the trust in order for your heirs to receive these assets upon your death. While it can be a time consuming process, it is something your estate planning attorney can assist with. It is also worth noting that you will still want to make a will to account for those assets that are not placed within the trust. Contact your trust and estate planning attorney to find out more about revocable living trusts and the many benefits a trust may offer your family.