Creating a living trust can expedite the settlement of your estate.
Some people have few concerns when it comes to settling their estates in probate.
Perhaps they have minimal assets, uncomplicated family dynamics, and need the probate judge to approve their choice of guardians for orphaned minor children anyway.
These individuals may be perfectly happy with creating a last will to designate the distribution of assets through probate when they die.
According to a recent nj.com article titled “Will a living trust save time and money when settling an estate?,” other people may prioritize probate avoidance in their estate planning.
Many people rely on a Revocable Living Trust (RLT) as their estate plan foundation to avoid probate.
Even so, probate may not be avoided completely.
For this reason, many RLTs include a “pour-over will” to direct any applicable estate assets not titled into the trust to “pour” into the RLT at the death of the Trustmaker.
Unfortunately, this “pour over” process requires probate.
What assets might not be included in the RLT?
This can include tax refunds, automobiles, bank accounts, and even the settlement proceeds from a wrongful death lawsuit (yes, I have seen that).
Because a RLT does not need to be filed with the probate court in nearly every jurisdiction, there is greater privacy.
It also can provide protections from challenges to your estate.
In addition to these positives, a RLT has several other benefits.
For example, in a “blended family,” RLTs can be used to separate assets owned separately prior to marriage.
This can be especially beneficial if you have children from a previous marriage and want to provide them an inheritance.
Settling an estate through probate can take longer and be more expensive than settling an estate using a RLT.
Although a RLT has its benefits, it can also have drawbacks.
Creating a RLT is more expensive than creating a last will and testament.
Transferring assets into a RLT can also come with a price tag.
This is known as “funding” the RLT.
However, short of real estate transfer deeds, almost everyone can “fund” their own RLT with attorney guidance and the assistance of their financial advisor.
Not everyone will need a RLT to accomplish their estate planning goals.
Discuss your situation with an experienced estate planning attorney to determine whether a RLT is appropriate for your estate plan.
Reference: nj.com (Feb. 8, 2021) “Will a living trust save time and money when settling an estate?”