Many Americans simply leave a will to distribute their assets upon their passing. However, the creation of a Revocable Living Trust creates several benefits unavailable to those simply leaving a will. Here are seven benefits to creating a Revocable Living Trust
1) Avoiding Probate- A great benefit of a living trust is that it avoids probate. Probate means the official proving of a will. This official proving is done at the Surrogates Court in the county where the person was domiciled before their passing. In order to probate a will, a copy of the will must be distributed to everyone who would inherit from the person’s estate if there were no will. In some cases, locating these people who would inherit can be very difficult, costly, and time consuming. By creating a trust, this issue can be avoided.
2) Privacy- Another key distinction between leaving a will and creating a living trust is the level of privacy. A living trust is not made public and upon death of the grantor, the distribution of an estate is done in private. A will becomes a public document once it is probated and anyone can view how you left your estate upon your passing.
3) Quicker access to funds- Probating a will and having the Surrogates Court grant authority to the executor can take months. With a Revocable Living Trust, the successor trustee can gain access the person’s funds quickly and distribute them according to the terms of the trust.
4) Revocable- The trust can be changed, revoked, or amended at any point during the grantor’s life. Once the grantor dies, the trust becomes irrevocable.
5) Protect your beneficiaries from creditors- Terms can be placed in the trust to protect your beneficiaries from creditors. If a trust owns the beneficiaries funds, creditors cannot gain access to those funds.
6) Avoid Ancillary Probate- If a person has property in multiple states, they can deed or transfer all property into the trust. Upon the passing of the grantor, the property can be distributed according to the trust. If a person has a will and resides in New York and has property in Florida, a court proceeding for probate would have to be started in New York. Following the executor given legal authority under the will by the Surrogates Court of New York, a second proceeding for Ancillary Probate would have to be started in Florida in order for the executor to collect the property in that state.
7) More Specific Terms- A trust gives the grantor more options as to when a beneficiary receives an inheritance or what condition is necessary for the beneficiary to receive their inheritance.
A Revocable Living Trust is more complex and expensive than a simple will, however, there are many benefits associated with it.