Does everyone need a revocable living trust as a part of their overall estate plan? With all the attention living trusts have received in the last several years, many people naturally assume that they must have one of these estate planning tools. The answer to this conundrum, however, is not that simple. There are many situations in which a living trust is likely not an appropriate estate planning tool. Today we are going to take a look why that is true, and who might not need a living trust.
Does Everyone Need a Revocable Living Trust? You don’t have a lot of wealth.
A living trust is primarily designed to transfer personal assets outside of the probate process. Once you die, your property will have to be transferred to new owners. The probate process is the legal process designed to ensure this transfer proceeds in a fair and impartial manner. Probate can be time consuming, expensive, and potentially problematic, so avoiding probate is often a good idea.
However, not everyone needs to avoid probate by using a living trust. Some assets, such as transfer-on-death assets and jointly owned property, automatically transfer outside of the probate process. Further, estates that don’t have a lot of property usually qualify for simplified probate procedures, and are not at a high risk of encountering problems or being subject to estate litigation.
Does Everyone Need a Revocable Living Trust? You’re not concerned with estate privacy.
Another key reason why many people choose to create a revocable living trust is because they want to keep their affairs private. The probate process is a matter of public record. This means that anyone who wishes can inspect the court’s records and look at what happened in the case. For people who want to keep their affairs private, avoiding the probate process by using a revocable living trust is a good option.
On the other hand, if estate privacy is not important to you, a revocable living trust may not be needed.
Does Everyone Need a Revocable Living Trust? You Don’t Have the Desire, or the Money, to Hire a Lawyer
A good revocable living trust is only as good as you allow it to be, and, if used incorrectly, can b more costly than it is worth. If you don’t take the time to create your living trust properly, go about the process of transferring property into the trusts name in the correct way, and forget to keep the trust up-to-date, your trust could lead to costly legal expenses and complications that an estate without a trust does not experience. Not only that, but there is a significant up-front cost to having an attorney establish a trust. If you don’t want to pay a lawyer to create a trust on your behalf, creating it on your own is often a bigger risk than not having one at all.
