To accomplish your estate planning objectives, you could implement a plan through one of two different legal documents. You could utilize either a traditional Will, or you could utilize a plan focused on the use of a Revocable Trust, also sometimes referred to as a “Living Trust.” In comparison to using a Will, implementing a plan based upon a Revocable Trust has the following advantages over a Will:
- Avoidance of Probate Court Supervision: First, following your death, your family can transfer the ownership of certain assets without the need of court-supervised (so-called “probate”) proceedings. By transferring assets to a Revocable Trust, the terms of the Revocable Trust apply following death, thereby avoiding any requirement that a court’s approval be required for the transfer of those assets following your death.
- Cost. We generally estimate that attorney’s fees and court associated with even the most basic probate court proceedings to be at least $2,000. In some cases, especially where it is necessary to transfer assets in multiple states, the costs could be as much as $5,000. Of course, the complexity of the situation will dictate the extent of the costs.
- Delay. We also generally estimate that it takes upwards of twelve to eighteen months for a family to fully administer a “probate” estate. In contrast, if you utilized a revocable trust as the vehicle of accomplishing your estate planning objectives, then your beneficiaries could begin receiving partial distributions almost immediately after your death.
- Efficiency of Transfer of Decision-Make Authority. If your assets are owned by a revocable trust, then in the event of your death or your mental incapacity, it is significantly more efficient for your named “successor Trustee” to make decisions. Your named successor Trustee would be able to immediately step in to your shoes, from a legal perspective, and direct the ownership of your real estate, business interests and securities accounts.
- Privacy. Finally, the nature and extent of the assets in your revocable trust is not of public record, either during your lifetime or at your death. If you own assets in your individual name at your death, then these assets may become part of a public record in probate proceedings. By owning assets through a revocable trust, this information remains private.