The goal of estate planning is to allow someone to control and designate how their property is distributed to others when they die. The goal for estate planning attorneys is to help people pass along as much of their estate as possible, avoiding probate, taxes and other costs.
In many cases, a revocable living trust is a beneficial option allowing you to distribute property as you see fit while averting the long, arduous and costly probate process. Trust owners can also direct how certain assets are distributed after death.
How is the trust created?
Working with an experienced estate planning attorney is crucial for setting up a revocable living trust. Once it is created, it must be funded, which means the trust becomes the owner of retitled assets, such as:
- Real estate
- Bank accounts
- Taxable non-retirement brokerage accounts
Three distinct advantages
There are no restrictions over using cash or other assets in the trust during the lifetime of the person who created it. While you can cancel the trust while you are alive, amendments are more common. The most significant benefits are:
- Avoiding probate: Trusts are especially popular in Massachusetts, which has more restrictive probate laws than many other states. They may also be an excellent fit for people who own property in two or more states, where they could face multiple costly probate proceedings.
- Avoiding guardianship: If you become incapacitated, the person you designate as the “successor trustee” can step in and manage the trust for you, without interference from a court and allowing for your wishes to be followed.
- Keeping your estate private: Probate is a public proceeding, and anyone can go into the courthouse and look up your will and other documents. That information can also be accessed by anyone online. Trusts don’t become public records because they are never filed with a court.
Knowledgeable legal advice is crucial for comprehensive estate planning
There are other considerations for forming a revocable living trust, such as the cost associated with its creation. Your attorney can also help you set up a “pour-over will,” which makes sure any assets left out of the trust are added after the owner’s death, even though those assets may be subject to probate.
While a revocable living trust can be a vital component of an estate plan, it’s just one part of an all-encompassing strategy, which should include documents such as a durable power of attorney for financial matters, an advance health care directive, guardianship for minor children and a living will.
