By Tucker Swiastyn | June 12, 2020
Many individuals now prefer an estate plan that uses a revocable living trust over a will as the primary estate planning document because it:
Helps Avoid Probate
A properly drafted and funded revocable living trust plan avoids probate at death, including multiple probates if you own property in different states. A will must go through a state’s probate process, and if you own property in more than one state, your family could face multiple probates, each one according to the laws in that state.
Plans for Incapacity
A properly drafted and funded living trust avoids court interference at incapacity. Most people prefer to have their care and assets managed privately by people they know and trust, instead of being placed in a court guardianship, which is costly, time-consuming, public, and stressful. A will is of no help at incapacity because a will can only go into effect when you die. With a revocable living trust, the trustee takes over immediately at incapacity.
Brings Assets Together
A living trust brings all of your assets together under one plan with one set of instructions. (Possible exceptions are IRAs and other tax-deferred plans.) This makes it much easier to provide fair inheritances to your beneficiaries, as opposed to trying to balance inheritances with beneficiary designations and joint ownership because of fluctuating values of investment accounts, life insurance policies, and other assets. A will only controls assets that are titled solely in your name (read about the importance of asset titling HERE); it does not control assets that pass automatically by operation of law, such as most jointly owned assets or those for which you have named a valid beneficiary.
A properly drafted and funded living trust is more private than a will and is not as easily contested. Because probate is a public process, disgruntled heirs and other interested parties are invited to submit claims and contest your will. Unwanted solicitors can have access to your family’s personal and financial information. That is not so with a revocable living trust.
Ensuring that your clients have a properly drafted and funded revocable living trust is crucial for the successful execution of the estate plan. The process of properly funding and properly titling assets is often overlooked. Making sure that this step is accurately completed is critical.
One of our Trusted Advisors can help you determine through trusted service what would work in the best interest of your clients when discussing revocable living trusts. You are your client’s Trusted Advisor, and we are your Trusted Advisor.
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