Clients often ask about setting up a living trust (or revocable trust) in order to save their families from having to probate their assets when they die. Probate administration of assets through the probate court is necessary when a person dies holding assets in their individual names. Depending on the nature and extent of the property in the estate and whether there are any disputes, the probate process can be fairly straightforward or lengthy and complicated. In order to avoid the probate process altogether, clients often choose to set up and transfer their assets into revocable trusts.
Another reason clients may choose to set up a revocable trust is to control the manner and timing of a child or other beneficiary’s receipt of assets after their death. If your children are minors, for example, you can direct your trustee to distribute assets to your children as they reach specific ages or milestones (attending college, marriage, purchase of a house, etc). Or if a beneficiary is a spendthrift or has an addiction or gambling history, you can control their receipt of assets so as to minimize the risk of their inheritance being seized by their creditors or spent on their addiction.
In recent years there has been a proliferation of ‘trust mills’ who claim that probate is always an expensive nightmare and everyone should have a living trust. This is not the case. Trusts initially involve a significant amount of work to transfer assets into the trust, and then must be reviewed periodically and amended if you wish to change beneficiaries or other terms. A thorough review of your situation and assets will allow you to weigh your choices and decide if a revocable trust would be right for you.
If you are considering a revocable trust, I will take the time to evaluate your estate as a whole and listen carefully to your financial wishes and needs. Once we have a clear understanding of your situation, I will assist you in choosing a trust or estate plan that meets these needs.