Revocable living trusts solve many common estate planning problems. As such they continue to be extremely popular. However, not everyone needs to get a revocable living trust as part of their estate plan.
When many people first consult an estate planning attorney, they assume they already know what they need in their estate plans before the attorney even says a single word. As revocable living trusts continue in popularity, many of these first-time visitors think that is the solution to their estate planning needs. Usually a friend or family member who has a trust will suggest it, or they may have read articles online suggesting everyone needs to have a revocable living trust. The truth is that revocable living trusts are designed for particular estate planning situations. They are not necessary in every situation.
- Probate Avoidance – If an estate might have issues in probate, a revocable living trust can be used to keep it out of probate. Not every estate will have issues with probate, however.
- Privacy Concerns – Wills are often subject to public scrutiny through the probate process. Because a trust does not go through probate, the details of an estate plan can be kept private.
- Second Marriages & Blended Families – Trusts can provide a way to ensure that assets go to a second wife first and that the remainder then goes to children of a first marriage, if that is the objective.
- Incapacity Planning – Trusts can provide a way for someone to manage your assets in the event you become too sick to do so yourself.
- Special Needs – If you have a relative with special needs, a trust can be used to provide for their care without jeopardizing their public assistance benefits.
Again, these are the primary reasons why you might want to have a revocable living trust as part of your estate plan. However, the important thing to remember is to go to an estate planning attorney's office with an open mind. Let the attorney tell you what the best options for your estate plan are.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Financial Planning (July 14, 2014) “Does Your Client Need a Revocable Trust?”