As we all try to stay above water in the current economy, we’re looking for ways to save money and some prospective clients have asked: “Is a revocable living trust worth the money?” Only you can decide for yourself. There is no right or wrong answer.
It is more expensive to set up a revocable living trust than to create a simple will. But, what does a simple will do? Not much. At least not much when compared to a trust.
Don’t get me wrong, a will is imperative. Everyone age 18 or older needs his or her own will. You appoint guardians for minor children in a will, appoint an executor, and direct who will divide your assets upon your death. That’s about it.
A revocable living trust can:
- Save money and time while keeping your affairs private by avoiding probate.
- Protect your beneficiaries’ inheritance from spendthrifts, creditors, and predators.
- Help you avoid disinheriting special needs beneficiaries.
- Prevent your assets from fueling a beneficiaries’ alcohol, drug, or gambling addiction.
- Include a trust share for your beloved pets.
- Encourage your loved ones as you would if you were alive.
- Provide successor trustees to follow trust instructions and manage your affairs if you become disabled or die.
- Keep the court out of your finances, family, personal businesses, and bank account.
- Minimize federal estate tax for married trust makers.
- Provide for your favorite charity.
Your revocable living trust is the center of the estate plan. It works in conjunction with your will, which is a “pour-over will.” The pour-over-will’s only beneficiary is your trust.
Other necessary and basic estate planning documents that work with your revocable living trust are: the general durable (financial) power of attorney, health care power of attorney, HIPAA release, and living will.