18 May Is It Expensive to Create a Revocable Living Trust?
By: Barry E. Haimo, Esq.
May 18, 2015
Is It Expensive to Create a Revocable Living Trust?
Revocable trusts are extremely valuable estate planning vehicles. Relative to their benefits, they are extremely affordable. It just depends on what kind of assets you have in your estate.
What Is a Revocable Trust?
Revocable trusts (often referred to as “living trusts” or “inter vivos trusts”) are an estate planning strategy that allows you to organize and control the management and disposition of assets during life and after death, while offering some additional protections to those assets after death.
These types of trusts can be altered during the life of the grantor – in other words, they are revocable. During his or her life, the Grantor or a trustee named by the Grantor may distribute the income and principal in the trust to the Grantor. But after the Grantor’s death, property in the trust is transferred to the named beneficiaries or administered in accordance with the Grantor’s wishes as are expressed in the agreement.
Probate, Guardianship, and Trusts
When someone passes away, his or her will has to be proved as valid, creditors have to be paid, proper notice given to all relevant parties and final affairs settled. This all happens in a process is called probate. If there are problems with the will, claims will have to be filed and disputed. A judge will ultimately decide whether your property will be devised pursuant to the will or by state law. The latter is referred to as the “laws of intestacy” or “the laws of intestate succession”.
Florida laws also stipulate that, if you become mentally incapacitated and are no longer able to control your property, a guardian will have to be appointed to handle things for you.
Probate and guardianship hearings can be time-consuming, expensive, and stressful. And they generally can and should be avoided Read more about probate here. The last thing you want is for your death to cause legal troubles for your loved ones. When you put property into a living trust, it is not subject to probate or guardianship procedures. Skipping this process can be a huge relief for your family during life and after death while your family members and friends are still grieving for your loss.
Benefits of a Revocable Trust
When you consider the costs of creating a revocable trust, you must also consider the benefits that trusts provide you and your loved ones. They help in smoothly transferring your assets to heirs and loved ones by allowing your estate to avoid probate and guardianship. Probate proceedings can be exceedingly expensive for your loved ones and make take away income or assets from future generations.
Revocable trusts also do not have to be filed with a court, and they provide privacy for you and your family. In contrast, probate proceedings are public. Your Will will become public information after your death. You should prepare a Last Will in case you fail to title all of your assets into the name of the trust, but any information that you do want to remain private can be excluded from the Will.
Living trusts also can address certain issues that are excluded from a Last Will. Since you can include wishes and delegate responsibilities to loved ones even while you’re alive, a living trust can help you plan for any mental disabilities or illnesses that may affect you before your death (Alzheimer’s, dementia, etc.).
Additionally, trusts can last for many generations. In Florida, there are trusts that last for up to 360 years! This means you can potentially secure the future of your family for a long, long time.
There are also asset protection benefits of trusts, which is the subject of other posts.
Your Estate Planning Attorney and You
Setting up a revocable trust can be extremely beneficial, especially when the unpredictable happens. But, just like any legal procedure, small mistakes in trust documents can result in time-consuming lawsuits and stressful legal proceedings for your loved ones.
That’s why it is so important to set up a trust with an experienced attorney. He or she will be able to find the best strategies to protect your assets. Choosing an estate planning attorney builds a life-long relationship that will greatly help your family in tough times. Contact a Florida estate planning attorney today to invest in your family’s future.
Barry E. Haimo, Esq.