A revocable living trust is a creature of State law which is similar to a Will. It is a very flexible instrument which, upon the death of one or more Grantors (in case of a married couple), makes it very simple for the successor trustee to management the property held in trust. Generally speaking, this is an instrument that is free of court supervision and does not require court management, unless a dispute arises. Thus, the assets can be managed seamlessly after the death of the grantor with a minimum of interference.
Another large advantage is that, generally speaking, the assets in the trust do not have to go through a formal probate administration. Thus the deceased can save on the fees for the probate attorney and personal representative which can hover near 6% of the gross estate or may even exceed that amount. Additionally, trusts are private documents that are not published in the public records, contrary to a will, which would need to be filed with the courts upon the death of the testator.
The trust is also very flexible so that minor beneficiary’s shares in the trust property can be managed by the trustee until those beneficiaries reach the age of majority without the need of a guardian. This type of benefit also holds true for assets held in a “spendthrift trust” which may shelter assets on behalf of beneficiaries with financial difficulties from claims of creditors.
A trust, similar to a will, costs a fee to set up but then there are no regular fees to maintain the trust. However, it is advisable that the grantors reach out to the drafter on an annual basis to make sure that there are no significant changes to the law that would prompt an amendment in the document to preserve the grantors’ intended purpose of the trust.
Disclaimer: This Article is meant to provide general information only and is not intended to be used as legal advice.