A lot of attention has been given to revocable living trusts in recent years. While these are excellent estate planning tools, revocable living trusts may not be right for everyone in every situation. A properly created and funded revocable living trust offers several key benefits, but that doesn’t mean everyone needs one. Here are several reasons why a revocable living trust may not be right for you.
A Revocable Living Trust May Not be Right For You: You Have a Small Estate
Your estate is what you leave behind after you die. Once that happens, the probate court determines what happens to your property. A revocable living trust is designed to avoid probate as much as possible because probate can be needlessly time-consuming, complicated, and expensive. With a revocable living trust, you largely avoid probate, thus minimizing the time and expense involved.
However, there may come a point at which minimizing probate by creating a living trust is not cost-effective. A living trust takes time and money to create. In order for a trust to be a financially sound decision, it needs to save you more money than it costs. For people with small estates, a living trust may not be a cost-effective proposition.
A Revocable Living Trust May Not be Right For You: You Aren’t Concerned with Estate Privacy
Another benefit of a revocable living trust is that it keeps your estate decisions private. Probate is a public process, meaning anyone can go to a local probate court and inspect its records. Once your estate goes to probate, its details will be open to public inspection.
When you create a revocable living trust you create a separate legal entity that owns your property for you. When you die, the entity continues to exist, will distribute your estate in accordance with your wishes, and will do so privately. This way, your wishes and decisions about your estate remain private.
If you’re not worried about estate privacy you may not need a revocable living trust.
A Revocable Living Trust May Not be Right For You: You Don’t Want to Talk to a Lawyer
A revocable living trust is a part of many estate plans. As with any estate plan, hiring an attorney to help you craft your living trust is preferable to creating it on your own. Should you make a mistake when creating or using your trust, it could prove far more costly than not having a properly drafted trust at all.
If, however, you are hesitant to hire a lawyer to help you create and advise you on the use of a living trust, you may be better off not creating one at all.