Pros and Cons of Revocable Living Trusts: Short Overview: about Living Trusts!
For most non-legal people, the creation of a revocable living trust is somewhat of a mystery. Many believe these legal instruments are only for high net worth individuals or stupendously wealthy people. Many are puzzled as to what is the need of a revocable living trust if one can simply sit down and type out a will? To put matters in perspective, revocable living trusts are not for everyone. They make the best estate planning tool for people depending on circumstances and their individual concerns. Similar to other things in one's life, this legalese has both advantages and disadvantages.
Pro factor: Probate can be avoided
Avoidance of probate is by chance the best advantage of any revocable living trust. There is no need to subject the people you love and the property you worked hard to own to restrictive probate court rules. All these problems could be quickly avoided if you fund a trust. The attraction of such an arrangement increases if you own real estate in multiple states. If you take the easy way out and only leave a will, those who inherit your property will have to contend with two or multiple proceedings. Each property must be probated at its location.
Your loved ones could take advantage of revocable living trusts to have immediate access to substantial cash during a difficult time. The time is much shorter than gaining access to the bank account or opening a probate estate. For the other two, the time taken may vary from two weeks to a number of months.
Pro factor: Avoid Conservatorship or Guardianship proceedings
There is more than death to revocable living trusts. The legal instrument could solve a few issues while the person continues to live. There is no reason to subject your property or loved ones to conservatorship's restrictive rules while incapacitated. The same goes for guardianship as well. Making a revocable living trust means naming a certain successor trustee and some person to take over responsibilities and manage the trust if owners cannot do it by themselves. The successor trustee could assume control over trust assets after finding out the owners' incapacity. There is no need for the courts to interfere in this regard.
Con factor: Considerable upfront expenses
It could take considerable chunks of money and time to establish any revocable living trust. Making a will is considerably cheaper. Even post formation of trust, it is a must to create new documents so that you can transfer asset ownership to it. Then again, revocable living trusts turn out to be cheaper when calculated over a longer period of time. The trust will enable the ones you love to side-step expensive court-supervised guardianship in case you became disabled. There will be no need for court-supervised probate proceedings post-death.
One important aspect to remember is that documents and all deeds transferring ownership should be created after you die. When you make a trust, you simply pay them in advance. There is no need for your loved ones to pay probate fees after all other fees
Con factor: Pain is trust funding
You must contact your insurance company, bank, and investment companies. The transfer agents must be called as well. It is compulsory to change stock ownership and change accounts. Beneficiaries must also be updated. New stock certificates should be issued. There should be retitling of boats and cars if you own them. To most people, these were the major problems of revocable living trusts. They were loath to use such a legal instrument as the primary planning tool for their estate.
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