Revocable Living Trusts.

Revocable living trusts are a powerful estate planning tool. Living trusts can bypass the expense, delay and hassle of the probate court process. They also will provide a smooth transition for money management if you are disabled. After you are gone, you can control the disposition of your estate to whom you want, when you want, and in the manner of your choosing.

Why was probate avoidance such a big deal? The probate court system can be slow and expensive, and it is open to the public. Not surprisingly, lawyers were slow to move their clients into living trusts. Adopting anything new is difficult, but will based planning could result in significant probate fees for the attorney. Legal fees from $10,000 to $40,000 on a million dollar probate estate were quite common.

But, the move to living trusts had problems. Some were sold as “probate avoidance” kits by sales people, without the involvement of attorneys and other planning professionals. Well meaning families and the elderly spent money for promises that weren’t fulfilled. Probate wasn’t avoided, and numerous other problems ensued.

Are you a candidate for a living trust? If you can organize your financial affairs while living, you can help take advantage of the benefits of a living trust.

What other advantages do living trusts have? No change in tax consequences while you are living; your property is immediately available after your death; you can plan to minimize death taxes; difficult to attack (wills can be contested easily); disability provisions avoid the hassle and expense of a trip to court - your trustees will manage and distribute your assets after your death in the manner you choose. While living, you are free to change the trust, cancel it and use its assets as you see fit. Living trusts also can provide many personal planning options. Professional money management can be arranged. You can make provisions for heirs with special needs, or that have problems with drug or alcohol abuse.

What are the disadvantages of revocable living trusts? Preparing a living trust is typically more expensive than creating a will based plan. Although wills that incorporate trusts and other advanced planning provisions may just as expensive. Funding the trust is the other significant problem.

Funding is the process of moving the trust maker’s assets into his or her trust. This process takes some attention to detail. When completed, you as trustee hold title to the assets in your trust. As trustee, you manage the assets for the beneficiary of the trust, which is you! Sound confusing? Actually, it isn’t, but it takes some education on your part to fully understand how trusts can work for you.

My clients, individually or in groups are introduced to Estate Planning 101. A presentation about the many facets of estate planning. I work to educate my clients about planning their estates. They, in turn, educate me about their families, their assets and their goals.

I encourage you to visit with a skilled estate planning attorney. Find one that will work with your tax and financial advisors to create a workable plan for you and your loved ones.