Even though revocable living trusts have been used in estate planning for many years now, they are still misunderstood. Many people have the misconception that revocable living trusts are part of complicated and sophisticated estate plans that are created only for the very wealthy, when in reality this could not be further from the truth. These days a revocable living trust can be used as the basic building block of a good estate plan for people of all ages, personal backgrounds and financial situations. When compared with a last will and testament, a revocable living trust offers the following advantages:
- A revocable living trust protects your privacy by keeping your final wishes a private family matter, while a last will and testament becomes a public probate court record for the whole world to see and read.
- A revocable living trust can and should provide instructions for the care of you and your property in case you become mentally incapacitated, while a last will and testament only goes into effect after you die.
- A properly drafted and fully funded revocable living trust will avoid the probate of your assets after you die, while property that passes under the terms of a last will and testament has to be probated.
With that said, revocable living trusts aren't for everyone. For example, if your main concern is avoiding probate after you die, then, depending on your family and financial situations, this can be accomplished without the use a revocable living trust. The same goes for protecting your assets in case you need long term care - in fact, this should be accomplished without the use of a revocable living trust. Yet while some estate planning attorneys advise against ever using a revocable living trust under any circumstance, others advise all of their clients to use one under any circumstance. What I have found is that revocable living trusts are definitely not one size fits all. Instead, each and every client must be evaluated on an individual basis and the pros and cons of using a revocable living trust must be weighed against the client's real concerns and estate planning goals. Sometimes simple solutions will ease the client's concerns and achieve the client's goals, but sometimes they won't. It's as simple, or not as simple, as that.