A revocable living trust affords many different benefits for the people who choose to use it.
There are six primary reasons why a living trust can be extremely beneficial for you. These include:
- Protecting property for certain beneficiaries who may be unable to control receiving such a large inheritance. This is very beneficial for anyone who has a spendthrift adult child.
- Minimizing or eliminating estate taxes. Depending on the size of your gross estate, transferring property into a trust can help to shield it from your estate when it is time to calculate the estate taxes.
- Avoiding probate. Many individuals see the benefits of avoiding probate as keeping their beneficiaries from having to go through the frustrating and sometimes expensive process. Probate is also extremely public, meaning that anyone can learn more information about your estate if you choose not to take advanced steps.
- Managing property after incapacity. Although there are other solutions such as a durable power of attorney, the most comprehensive solution is a revocable living trust. This allows a successor trustee to take over in any situation in which you become incapacitated or when you choose to resign. There are many different ways that a revocable living trust can benefit you in this manner.
- Avoiding will contest. Wills are much easier to contest than a revocable living trust. Since a revocable living trust contest requires that the individual arguing that you have been unduly influenced or were incompetent has to prove that you met those criteria every single time that distributions were made or property was transferred into the trust as well as when you created the trust to begin with.
- Privacy. Many individuals dislike the process of probate because it is extremely public, but a revocable living trust is extremely private and information is only given out in the event that a trustee or the grantor allows it to be so.