Path #6 - Write a Revocable Living Trust
Question: What control do you have? Answer: A well written, fully funded Revocable Living Trust coupled with the appropriate ancillary documents, including a pour over will, assures that you will have total control of your affairs and that those you know and trust will be in charge of your estate should they become incompetent and following their death.
What fees, costs and commissions have you saved? Answer: As long as the estate is larger than the small estate cut off limit in your state, a Revocable Living Trust centered estate plan will always be substantially less expensive than a will centered estate plan (i.e. your estate will have avoided probate).
In a living trust centered estate plan, following your death, the successor trustee named by you in your Revocable Living Trust will be in charge. Your successor trsutee must follow the Revocable Living Trust's instructions as to the allocation and distribution of your estate.
For a Revocable Living Trust to work, you must do five things:
- Write a comprehensive state specific Revocable Living Trust that anticipates realistic contingencies.
- Transfer most of your property to the Trust.
- Name a reliable and trusted successor trustee to take over the management of your affairs should you become incompetent and at your death.
- Keep the trust current in respect to the law, in respect to your wishes as to the management of your affairs during your lifetime, and in respect to the allocation and distribution of your estate following your death.
- Assure that the trust estate is settled following your death by a trusted and experienced individual who understands how to settle a living trust quickly, efficiently, and thoroughly.
Living trusts are complex, more complex than most wills. Contrary to a will that can be written and then promptly forgotten about, once a Revocable Living Trust is written, you must inventory your estate and transfer your property to your trust.
These two items; 1) writing a more complex document than a will, and 2) the oversight of the transfer of the property into the trust, inevitably incur more costs and expense than does the initial writing of a will. The savings are realized only following your death. At that time the savings are usually substantial.
Therefore, you have to decide, whether you want to be responsible for the hard work of estate planning during your lifetime, or whether you want to leave the hard work to your surviving spouse and children. As with most things, in virtually every case, the work will be done more thoroughly, efficiently, and less expensively if you do it during your lifetime rather than leaving it for others to do following your death or incompetency.