Estate planning enables you to safeguard your assets and alleviate the financial burden on your family in the future. A revocable living trust is a powerful legal tool for this goal. It holds title to your assets while you, the grantor, keep complete control as the initial trustee.
Trusts can be vital in California because they help avoid the state’s famously lengthy, costly and complicated probate process for many high net worth individuals. A well-written revocable living trust offers significant advantages beyond a standard will.
Five pillars of protection
Protecting your high-value assets requires planning. A revocable trust provides security on multiple levels, such as:
1. Avoiding probate
For many, the most crucial benefit is that use of a revocable living trust avoids probate. Any assets held in the trust do not pass through probate, so when you pass away, your successor trustee can immediately follow your instructions to distribute assets. No formal court hearings or procedures are required, which often means that the estate administration can be completed much more quickly and efficiently than if a probate was necessary. This can save your beneficiaries months or even years of delays and potentially tens of thousands of dollars. Still, it’s advisable to have an experienced trust attorney explain the potential advantages or disadvantages.
2. Control and management
Transferring your assets into a revocable trust during your lifetime does not mean you lose access to them. As long as you can make decisions, you remain the trustee. You retain complete control over buying, selling, spending, investing or managing the assets.
3. Flexibility and adaptability
The trust is “revocable,” which highlights its essential flexibility. You can amend your trust, change beneficiaries, add new assets, or even cancel it at any time. This adaptability is critical when your life circumstances change, such as after a large asset purchase, the birth of a grandchild or a divorce.
4. Privacy
Trusts are confidential family documents during the grantor’s lifetime. After death, the successor trustee must provide a copy of the trust only to all legal heirs and beneficiaries upon request, unlike a will, which becomes a public record when it is filed for probate.
A court-supervised probate administration is public, meaning that anyone can view details about your asset values, debts and beneficiaries. A trust administration is private – use of a revocable living trust shields your financial affairs from public review, protecting your privacy.
5. Disability planning
A will only takes effect after you die, but a trust can be used during your lifetime. If you ever become unable to manage your affairs, your pre-selected successor trustee can immediately step in. They typically can manage trust assets, pay bills, and handle investments without going to court, which can save your family the expense and stress of a court-supervised conservatorship.
Ensure peace of mind
A revocable trust offers many benefits through efficiency, control, and privacy, but it is only effective when properly prepared and properly funded by transferring assets into it.
Don’t wait to put these protections in place. A skilled estate planning attorney can tailor a comprehensive estate plan, which may include a revocable living trust, to manage specific assets and accomplish your goals.
