Importance of a “Revocable Living Trust”

BY ROBERT E. FRAVEL, ESQ.

I have long been of the opinion that Living Trusts are not the “one size fits all” estate planning solution that many once claimed them to be. However, that does not mean that Living Trusts do not have their advantages. This article will highlight some of the advantages associated with Living Trusts.

1. Avoidance of probate and keeps affairs private.

While the probate process in Pennsylvania is not overly burdensome, there are some fees that accompany the probate process and once the probate process begins, the amount, manner and method of asset distribution become public knowledge. One of the key advantages to using a living trust to avoid probate is that the amount, manner and method of asset distribution stay private and for many people privacy is a key concern. A revocable trust can protect the privacy of your property and beneficiaries when you die. Since it's not subject to probate, your trust agreement remains a private document. It doesn't become a public record for all the world to see. Your assets and who you've decided to leave your estate to will remain a private family matter.

2. Eliminates ancillary probate.

If a client owns real estate in a different state (Ex. A beach house in New Jersey), ancillary probate may be necessary in order for the personal representative to administer said real estate. Which means, that upon the death of the client, the personal representative of the client’s estate will have to open up an additional estate in New Jersey in order to properly handle the liquidation or title change of the beach house. However, if that beach house was part of a Living Trust, ancillary probate would not be necessary. The trustee would already have the legal authority to handle out of state assets.

3. Retention of control

One distinct advantage of a Living Trust, is the grantor’s ability to maintain control over trust assets during his or her lifetime (the grantor is the person who created the trust and funded the trust with assets). With estate planning, we typically think of documents that dictate how our property will be managed when we are either unable to do so (i.e. Power of Attorney) or after we die (Will). However, if the grantor is also the trustee of the Living Trust, he or she will be able to retain control over the trust assets and have full authority to dispose of them during her lifetime. This means that if you want to change a provision in the trust document or even eliminate the trust all together, you, as the grantor, have every right to do so. If the trust were irrevocable, once that trust document is signed, the grantor could not change the terms.

4. Plans for incapacity robert e fravel, eSQ iS a buCKS County attorney loCated at 123 n main Street, Suite 101b, in dublin, PennSylvania. He SPeCializeS in eState Planning & adminiStration, family law, and buSineSS law to Set uP a ConSultation, Call HiS offiCe at (267) 227-9138 or viSit HiS webSite at www fravel-law Com

A revocable living trust allows you to plan for mental disability. Assets held in the name of a revocable living trust at the time the grantor becomes mentally incapacitated can be managed by a successor trustee, someone the grantor names in the trust document to take over in the event he can no longer manage the trust himself. This is an advantage similar to that of a Power of Attorney. Estate planning is centered around planning for the unexpected, and any document that provides a plan in the event of incapacitation is very useful.

If you think that a Living Trust may be a beneficial addition to your estate plan, or if you are not sure if a Living Trust is the right estate planning tool for you, make sure you schedule an appointment with an estate planning attorney.