Using A Revocable Living Trust To Avoid Probate

When planning what happens to your stuff after you die, many people want to avoid something called probate. Probate is a legal process that can be long and expensive. One way to avoid probate is by using a Revocable Living Trust (RLT). Below is a simple guide from our friends at Stuart Green Law, PLLC to understanding what an RLT is and how it can help.

What Is A Revocable Living Trust?

A Revocable Living Trust is like a special account where you can put your belongings, like your house, money, and other valuable things. The cool part about it is that you can change or cancel it anytime while you’re alive. When you die, the trust can’t be changed anymore.

You, the person who makes the trust, usually manage it at first. You’ll also choose someone called a successor trustee who will take over managing the trust if you can’t anymore or after you die.

What Is Probate And Why Avoid It?

Probate is the process where a court helps distribute a person’s belongings after they die. This process can take a long time, sometimes years, and can cost a lot of money. Also, everything that happens in probate is public, so anyone can see it.

How A Revocable Living Trust Helps Avoid Probate

Here’s how an RLT can help you avoid probate:

1. Ownership: When you put your stuff into the trust, the trust owns it, not you. Since the trust doesn’t die, the things in it don’t go through probate. They are given out according to the trust’s instructions.
2. Quick Access: People who inherit from you (your beneficiaries) can get their inheritance faster because they don’t have to wait for probate to end.
3. Privacy: Trust details are private. Unlike probate, where everything is public, what happens in a trust stays private.
4. Saving Money: Even though setting up a trust costs money at first, it can save a lot on probate fees and court costs later.

How To Set Up A Revocable Living Trust

Setting up an RLT includes these steps:

1. Talk to a Lawyer: A revocable living trust lawyer can help you create the trust document, making sure it’s legal and says exactly what you want.
2. Put Your Stuff in the Trust: You’ll need to transfer ownership of your belongings into the trust. This means changing titles and deeds so the trust owns them.
3. Choose a Successor Trustee: Pick someone you trust to manage the trust if you can’t or after you die.
4. Write Down Your Wishes: Clearly state how you want your things to be managed and given out. This includes naming who gets what and any special instructions.
5. Check and Update: From time to time, review your trust to make sure it still matches your wishes and update it if needed.

Things To Think About

While an RLT has many benefits, there are some things to consider:

• Taxes: An RLT doesn’t give you tax breaks while you’re alive. You still pay taxes on the money the trust makes, and it’s included in your taxable estate.
• Managing the Trust: Keeping track of the trust can be a bit of work, especially if you have a lot of different things in it.
• Initial Costs: Setting up a trust can cost more money upfront than making a will, but it usually saves money in the long run by avoiding probate.

A Revocable Living Trust is a useful tool to help avoid probate. It makes sure your stuff is given out quickly, privately, and can save money. By understanding how it works and getting help from a professional, you can set up a trust that meets your needs and gives you peace of mind.