The Benefits of Revocable Living Trusts
Revocable Living Trusts are legal entities that hold your property while you are alive and contain instructions for distributing that property after you pass. Unlike a Will, a Revocable Living Trust does not need to go through probate. Instead, the person you have chosen to be your Successor Trustee is free to distribute your assets to your beneficiaries based on the terms you have chosen, free of Court supervision and with no public filings. Here are some of the benefits of Revocable Living Trusts:
Ease of administration.
Living Trusts are easier for your loved ones or other trusted advisors to administer after you pass. When you die, your Trustee simply distributes your assets according to your instructions. The process is free of court supervision and can proceed according to the Trustee’s timeline. Depending on the amount of assets held in the Living Trust and the complexity of the distribution provisions, your Trustee may need only minimal assistance from an attorney to administer your estate.
Having a Living Trust allows you to avoid having your estate pass through probate. The probate process requires a copy of your Will be filed with the Court and, in many cases, an Inventory of your estate. Probate filings are public records and available to anyone who petitions the court. The terms of a Trust, in contrast, are kept private. The only people who know the value of your estate are your beneficiaries, and, if you so choose, the beneficiaries may only know the amount they have inherited, not the total value of your estate.
Protections for Children.
Revocable Living Trusts allow you to set up guidelines for how and when your beneficiaries receive their inheritance. This is particularly important when you have minor children. A Trust allows you to leave management of your children’s inheritance to your trustee—a trusted adult chosen by you--and to set up a timeline for when your children (or grandchildren) receive their assets. For example, many people chose to give their children the chance to “practice” managing a portion of their inheritance with the security of knowing that a levelheaded trustee is keeping the remainder of the inheritance safe. You can also direct how the assets are used, for example for college expenses instead of for a gap year in Bali.
Protections for Adult Beneficiaries.
You can also set up these types of protections for adult beneficiaries who may have difficulty managing money, have substance abuse issues, or have special needs.
Probate takes an average of six months in Idaho. With a Living Trust, your Trustee can typically begin distributing your assets much earlier.
Lower likelihood of being contested.
Living Trusts are less likely to be contested. During probate, attorney’s fees are given priority of payment from the estate. This means that attorneys representing an heir who contests a Will are guaranteed to be paid. Attorneys are often willing to defer their fees in this situation, meaning an heir can contest a Will with few, if any, out-of-pockets costs. In contrast, a person challenging a Living Trust has to pay their attorney upfront, making the challenge much more costly.
For those with sizable assets, Living Trusts can help mitigate estate taxes.
Protections for blended families.
Revocable Living Trusts are great vehicles for blended families because they allow spouses to provide for each other while also balancing the needs of children from an earlier marriage.