What is a Revocable Living Trust?
The revocable living trust has been a significant estate-planning tool for many years and is the foundation for most estate plans. It provides privacy, while avoiding probate and family in-fighting. It ensures the right money and assets gets into the right hands at the right time.
What often attracts individuals to a revocable living trust is the flexibility to change or alter terms at any time.
A living trust avoids probate and the pitfalls associated with a will. While it does not provide asset protection, like an irrevocable trust, it is flexible and is the basis of many family estate plans. However, it does require moving assets around and won't work if you don't use it and fund it properly.
Another benefit of a living trust is the privacy and flexibility it provides trustors and their beneficiaries. Living trusts are never filled with a court, therefore they do not become public records. As mentioned above, living trusts also help avoid probate, which keeps your records out of public proceedings. Additionally, as a revocable living trust, changes can be made at any time during the lifetime of the trustmaker.
Living trusts are also beneficial during life. Without a trust, your assets would be subject to the restrictive rules of guardianship or conservatorship if you were to become disabled or incapacitated. A revocable living trust allows you to name a successor trustee so that someone can manage your trust and assets if you can no longer do it yourself.
Additionally, by naming a professional trustee to manage your property, the wealth that you’ve accumulated can continue to grow for multiple generations and you can put restrictions on the income or withdrawals.
How Much Does it Cost to Start and Maintain
a Revocable Living Trust?
The national average cost for a living trust for an individual is $1,100 to 1,500 U.S. dollars.
However, costs vary from state to state.
When working with an attorney, look to pay upwards of $2,000 to cover fees. According to AttorneyFee, among the factors that go into the cost of an attorney creating a Revocable Living Trust are:
- The assets needed to be retitled
- The complexity of the estate plan
- Purpose of the Trust
- Tax and financial circumstances
- When and how the assets are to be transferred
- Appointing a person to manage assets for minor children
- Value of estate
- Provisions of the Trust
If you were to create the living trust online yourself, it cost anywhere from $100 to $500. However, it’s important to take into consideration what specifics you need for a living trust because most online forms only include the very basic information.
Should You Set Up a Revocable Living Trust?
Anyone with assets that are titled solely to themselves that wants to leave those assets to family or friends if they become incapacitated or pass away, should consider having a revocable living trust.
Regardless of your net worth, a revocable living trust protects you and your family from mental and financial stress.
It’s important to note that not all revocable living trusts are created equal. Working with an experienced estate planning attorney will ensure that your living trust is well-drafted and contains provisions for determining your mental capacity outside of court proceedings, as well as how to take care of you and your assets if you were to become incapacitated. Details such as these will save you thousands of dollars in probate.
Whether you’re single, a married couple, or have minor beneficiaries, you should talk to an attorney about setting up a revocable living trust. There are distinct benefits for each group and the flexibility these types of trusts provide makes it easy to customize to your unique situation.
Whether a revocable living trust is the right choice for you and your beneficiaries depends greatly on your specific needs and circumstances. Although the advantages of creating a revocable living trust usually outweigh the disadvantages, the decision to create one requires a thorough legal analysis of several factors as they affect each individual and family.