A living trust, also known as a revocable Living Trust or a Family Trust is a legal document that holds title or ownership to your real property and assets. When you create a Revocable Living Trust you transfer ownership of your assets to the trust. Transferring assets is typically called “funding.” When you transfer title you DO NOT relinquish any control. You can still buy, sell, borrow or transfer.
The living trust is a written legal document that allows you, as the trustee(s), unlimited access to and full control of your assets during your lifetime. It also enables you to pass property after your death to family, friends and/ or loved ones. It allows you to appoint someone (a successor trustee) to make certain your property goes to the ones you choose after your death.
Pros of Using a Revocable Living Trust
Avoiding Probate- This is probably the biggest advantage of using a Revocable Living Trust. Why subject your loved ones and your property to the restrictive rules of probate when you can easily avoid it with the use of a fully funded Revocable Living Trust? This is particularly important if you own real estate in more than one state because without a trust, your loved ones will be forced with two or more probate proceedings. A Revocable Living Trust will also give your loved ones almost immediate access to cash during a difficult time. Compare this with the time it takes to open a probate estate and gain access to your bank account (anywhere from a few weeks to several months). Additionally, your estate will not be responsible for statutory attorney’s fees that are associated with a probate.
Avoiding Guardianship or Conservatorship- This is an advantage of using a Revocable Living Trust that’s often overlooked. Why subject your loved ones and your property to the restrictive rules of guardianship or conservatorship when you can easily avoid it with the use of a fully funded Revocable Living Trust? After following the trust provisions for determining your incapacity, your loved ones will be able to take over control of your trust assets without interference by a judge.
Keeping Things Private – As required by state law, probate is a public proceeding. This means that anyone can go to the court house and take a look at each and every probate file being stored there. Contrast this with a Revocable Living Trust – it doesn’t need to be filed with a court, so it won’t become a public record for everyone to see, while anyone can read a Last Will and Testament that’s been admitted to probate.
Forcing You to Get Organized – When you set up a Revocable Living Trust, you’ll be required to fund your assets into it, and this, in turn, will force you to find account statements, stock certificates, and deeds to real estate.
