A. The advantages of having a revocable living trust in place are:
- Avoidance of Probate - Probate is the legal process for transferring your property when you die. Establishing this trust can be especially useful in avoiding expensive multiple probate proceedings when you own real estate or other property in several states. Assets named in the trust avoid the costly courts and typically take precedence over the property designated in your will;
- Changeable or Revocable - The living trust allows you to make changes (or amendments) to the trust document while you are still alive;
- Privacy Preservation - The living trust allows the transfer of your personal assets to remain private within the constraints of the trust document. The probate process may expose your estate to the public;
- Eliminate Challenges to the Estate - The standard will can create family disputes at your death and be challenged for alteration by any member of your family. By using a trust, you can specifically disinherit anyone who posts a challenge to your wishes upon your death;
- Assignment of Durable Power of Attorney /Guardianship - A living trust can be used to help control a guardian's spending habits for the benefit of your minor children. It can also authorize another person to act on your behalf if you become incapacitated and need someone else to make medical decisions for you;
- Continuous Management - This allows the wealth that you've accumulated to continue to grow for multiple generations by using a professional trustee to manage your property. You can limit the amount of withdrawals to income only, with special emergency provisions if you wish; and
A revocable living trust also has some drawbacks:
- Maintaining Trust Books and Records - You should consider the added inconvenience of making sure that future assets are continuously registered to the trust and providing other professionals with access to the trust documents to review trustee powers and duties.
- Re-titling of Property - Once the trust is established, property must be re-titled in the name of the trust. This requires additional time, and sometimes fees apply to processing title changes.
- Expense of Planning - While the standard will document might cost you under $100, you should expect to pay significantly more to have a lawyer draft your trust. Costs can run as high as $2,000 or more, depending on the complexity of your situation.
- Minimal Asset Protection - Contrary to popular belief, revocable living trusts offer very little protection of assets from creditors and New York State recovery and eligibility for Medicaid; and