Some people think that trusts are only used by people who have very complicated and valuable portfolios. Indeed, there are trusts that are used by people who have estate tax efficiency and asset protection concerns. However, there are trusts that are used for other purposes.
The revocable living trust is one of them.
Revocable living trusts can be useful for a wide range of people, even those who are not especially wealthy. If you have assets that you want to pass along to your loved ones in a quick and efficient manner, you should certainly consider the creation of a revocable living trust.
Will vs. Trust
If you use a last will as your vehicle of asset transfer, you name an executor to administer the estate. The executor cannot immediately distribute assets to the heirs that you name in the will. The will must be admitted to probate, and the Surrogate’s Court will then supervise the administration of the estate.
This process does not run its course overnight. Even if the case is relatively straightforward, it will take close to a year for the estate to be probated and closed by the court. This time lag can create difficulties for some inheritors.
Probate expenses can also accumulate, and anything that is spent during the process is money that would have otherwise gone to the family of the decedent.
If you were to use a revocable living trust instead of a last will, the trustee that you choose would distribute assets to the beneficiaries in a timely manner outside of the probate process.
Choice of Trustee
If you create a revocable living trust, you can act as the trustee initially, so you control the actions of the trust while you are living. You name a successor trustee to administer the trust after you pass away.
You could name someone that you know to act as the trustee of the revocable living trust. However, if you go this route, there can be longevity concerns. Will the trustee live long enough to assume his or her duties?
In addition to this, do you know anyone who is qualified to administer a revocable living trust?
Conflicts of interest can be another factor.
To avoid these potential drawbacks, you could use a corporate trustee like a trust company. When you go this route, you can be certain that the trust is administered in a competent and professional manner.
Learn More About Living Trusts
If you are interested in the possibility of creating a revocable living trust, download our special report to learn more. This report is being offered on a complimentary basis, and you can click this link to obtain access to your copy: Smithtown NY Living Trust Report.