Most adults have considered that something terrible could happen to them in the future, leaving them incapacitated. Unfortunately, many people do not consider putting together a solid plan if something does happen.
When you create a revocable living trust, you establish how you want to preserve your assets. If you are thinking about making a revocable trust, you can consider the following pros and cons.
The Pros of Revocable Living Trusts
One of the biggest reasons to choose a revocable living trust is because you want to avoid your assets going through the probate process. Your loved ones would otherwise need to go through a long and grueling process, especially if you own properties and businesses in different states.
Conservatorship and guardianship are also easy to bypass with a trust. With either of these two options, your assets would be overseen by a court-appointed person, potentially creating a disparity in continuity. Revocable living trusts may allow you to bypass this step.
At the same time, a trust allows for more privacy than if you filed a will, which would be a matter of public record. If you are a private person, you will find this to be a great benefit.
Putting your assets into a revocable living trust allows you to force a sense of organization into your legacy. When you work with a legal team to create a trust, you better understand your own needs and desires for the preservation and distribution of your assets.
You should consider a revocable living trust if you own businesses or real estate, especially in different locations. In doing so, you clear up questions and build a well-oiled machine with the potential to operate just as smoothly in case something does happen to you.
The Cons of Revocable Living Trusts
Of course, not every factor involved in setting up a trust is going to benefit you, at least not right away. In some cases, you may still need to talk with your lawyer about the potential detriments to establishing a trust.
First, a revocable living trust may be costly in the beginning, at least in comparison to writing a living will and testament. In the long run, you may benefit financially from avoiding the lengthy processes of probate and guardianship though.
Additionally, the process of funding a revocable living trust can feel painstaking. You have to reach out to different insurance agencies, investment companies, banks, and other organizations to fulfill your needs. Thankfully, legal assistance can help you take care of this essential step.
Keep in mind that you will still need a living will as well, just in case you haven't covered everything in your trust. Assets not covered in the trust may still go into probate.
You should also know that a revocable living trust is still contestable. Plus, creditors still have access to assets in certain situations.
Finally, you should note that a living trust may not be necessary in every situation. If you only have bank accounts and life insurance, a trust is typically not necessary if you already have a will, medical directive, or power of attorney.
If you are not sure whether a revocable living trust is right for you or not, talk to a lawyer with experience in probate and estate laws. They can give you advice specific to your situation and help you set up a will, a living trust, or another estate planning option.
Clara Yang, Attorney at Law, understands that you want to establish a responsible way to take care of your finances and other assets. Contact our office for legal assistance when you need to plan for the future.