A revocable living trust can be a powerful estate planning tool. Generally, a revocable living trust is a type of trust that can be cancelled at any time and the grantor of the trust is both the trustee and beneficiary (allowing for control of the trust’s assets).
With a revocable living trust, assets can be distributed to the grantor, and upon death, a “successor trustee” distributes the assets in accordance with the legal dictates of the trust.
Some of the Pros of a Revocable Trust
Probate can be avoided. Upon death, assets held in the revocable trust bypass probate, meaning the assets can pass to heirs without involving the courts, which can be time-consuming and expensive. A successor trustee generally takes over without court oversight.
“Ancillary” probate in another state can also be avoided. Moving property into a revocable trust (and registering the deed to the trust) can avoid certain probate issues involving out of state property.
Protection in case of incapacitation. At the point of incapacitation, a successor trustee can take charge, and that trustee has a fiduciary responsibility to manage trust assets for the grantor.
Some of the Cons of a Revocable Trust
No immediate tax benefits. Shifting assets into a revocable trust won’t save income or estate taxes.
No asset protection. Although assets held in an irrevocable trust are generally beyond the reach of creditors, that’s not true with a revocable trust.
It requires some administrative work. After creating a revocable trust, assets must be retitled into the trust’s name because assets not formally held in the trust still have to go through probate and won’t be under the management of a successor trustee in case of incapacity. But certain types of assets can still avoid probate, like retirement plans, insurance policies, annuities and jointly held property, meaning a revocable trust may not be always needed.
What Do We Do as California Estate Planning Attorney Specialists?
The San Jose Estate Planning attorneys and staff at Credere Law help people plan for when the difficult times come.
Make an appointment to meet with Credere Law for Estate Planning, Probate and Trust Administration. We offer in-person, phone, and Zoom appointments. Just call (650) 308-8624.
This blog does not constitute legal advice and does not establish an attorney-client relationship. If you need legal advice, please contact a lawyer directly.