A revocable living trust is a legal entity (and a document) to which you transfer all or part of your assets during your lifetime. You retain the power to remove or sell the assets and to change or revoke the trust. It provides for the management and distribution of your property during your lifetime and after your death.
My South Shore estate planning clients sometimes come to me saying that their neighbor told them that they “need a trust.” After our planning session where we review their situation in their entirety, sometimes it turns out that they do need one and sometimes it turns out that they don’t necessarily need one, but they can decide to have one as part of their estate plan if they wish. Below are some of the pros and cons of having a revocable trust as part of your plan.
- A trust provides for a seamless and faster transfer of decision-making and asset management power in the event of your incapacity or death.
- A trust avoids the time and expense associated with the probate process.
- A trust can make the transfer of out-of-state property much faster and simpler by avoiding the need to probate an estate in a second state.
- A trust is private. Wills are filed with the Court after a person dies and are available for the public to review. A trust is not filed with the Court.
- A trust is generally more difficult to contest than a Will.
- Homes in a trust can still be protected by homestead declarations.
- The legal fees of setting up a trust are generally higher than those for just having a will.
- With a trust, you will need to do some of the foot work of changing titles to accounts and houses in order to properly fund the trust.
- There is no Court supervision of a Trustee as there is with a Personal Representative serving under a Will.
Which ever option you and your attorney decide is best for you, the important thing is to have a plan drafted so that you are in control of the decisions regarding your property.