In terms of avoiding probate, it is true that there are other methods you might consider, such as assigning assets to designated beneficiaries, or a simply establishing joint ownership.
However, the advantage of a revocable trust for probate avoidance is that, when it is established and properly funded, it ensures a consistent estate plan.
Too often, when people rely on designated beneficiaries and joint ownership, the result is a plan that is skewed unintentionally toward one or another beneficiary. The reason for this is that if you have multiple beneficiary designations, and you change one but forgot to change the others, you may create a different distribution than the one you had in mind. By contrast, with a revocable trust, the change can be made once (by means of an amendment to the trust) and this will affect all assets.
Other reasons for creating a revocable trust include:
- Minimizing estate taxes
- Keeping assets available for children until they reach adulthood
People often ask about the difference between a will and a trust.
There are numerous benefits to executing a revocable living trust as opposed to a last will and testament, in particular the following three:
- Probate: Once property is transferred into a revocable living trust, it does not go through Probate
- Privacy: Unlike a last will and testament, a revocable living trust is a private document, and is thus not published
- Control and Simplification: In addition to a revocable living trust not complicating the management of your assets during your lifetime, it also simplifies the transfer of your estate to your beneficiaries upon your death
As noted in our February 13 post, there are certain methods that can help you avoid probate. An additional method is to create a revocable trust.
One advantage of a revocable trust for probate avoidance is that, when it is established and properly funded, it ensures a consistent estate plan. Too often, when people rely on designated beneficiaries and joint ownership, the result is a plan that is skewed unintentionally toward one or another beneficiary. The reason for this is that if you have multiple beneficiary designations, and you change one but forgot to change the others, you may create a different distribution than the one you had in mind.
By contrast, with a revocable trust, the change can be made once (by means of an amendment to the trust) and this will affect all assets.
