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You have two primary choices for transferring assets upon your death: a Last Will and Testament and a Revocable Living Trust.  Unfortunately, many families do neither because they think estate planning is only for the very wealthy or believe that their children can easily divide and distribute their assets after they die. 

 If you die without a Will or trust, the State of Massachusetts will likely control how your property is dispersed.  This means settling your estate will be more difficult, slow and costly.

Revocable living trusts have become a popular alternative to the traditional Last Will and Testament as a more efficient and cost effective way to pass property on to your loved ones when you die.  Many individuals and families wonder if they really need a living trust. We can determine whether a living trust is right for you, and design it to meet all of your needs and goals.

What Is the Difference Between a Revocable Living Trust and a Will?

To many, the revocable living trust looks a lot like a Will because it includes the details and instructions for how you want your estate to be handled at your death, and it appoints a successor who will be in charge of your estate upon your death.  But unlike a Will, a properly funded trust provides the following benefits:

Flexibility and Control – As the “Trustor,” “Trustee” and the lifetime “Beneficiary” of your own trust, you retain full and complete control over all your assets during your lifetime.  Upon your death, the assets in the trust are managed and distributed according to your desires written in the trust document.  The revocable living trust gives you control over the assets you leave to your minor children, grandchildren or other beneficiaries who you might not want to receive their inheritance right away (including special needs beneficiaries or financially irresponsible beneficiaries).

Avoidance of Probate – Assets titled in the name of the revocable living trust at the date of death are not subject to probate administration.  This avoids thousands of dollars in executor fees and attorneys’ fees, not to mention a possible one to two-year delay for your family while the estate assets are tied up in probate.

Planning for Incapacity – If you become incapacitated, incompetent, disabled or simply desire to be free of the worries of day-to-day asset management, the revocable living trust designates a “Successor Trustee” who can step in to manage your financial affairs without the necessity of going to court to have a conservator appointed (which is, again, a very costly, public and slow process).

Continuity of Asset Management Upon Death – Upon your death (or the death of the surviving spouse), the Successor Trustee automatically steps in and begins to manage the estate without the delay or “red tape” associated with probated estates.
 

Privacy – Revocable living trusts offer privacy as to who inherits the estate, when they receive it and how much they receive.
 

What Is a Revocable Living Trust?

A revocable living trust is a legal document that holds title or ownership to your property and assets. When you create a revocable living trust you transfer ownership of your assets to the trust (a process referred to as “funding” the trust).  Like a Will, the trust is “revocable,” meaning that you can modify or eliminate it at any time. 

A revocable living trust is created by a written document which appoints a "Trustee" (typically you during your lifetime) to own and manage the trust assets and which gives detailed instructions on how the property is to be managed and eventually distributed.  

It allows you, as the Trustee, unlimited access to your assets during your lifetime.  Furthermore, since the trust is “revocable,” you can transfer your assets into and out of the trust as you deem appropriate.

What Are Some of the Most Common Mistakes When Implementing A Revocable Living Trust?

Probably the most common mistake is the failure to properly “fund” the trust.  That means that the clients failed to re-title their assets in the name of the trust.  Another common mistake is the failure to properly consider the role and responsibility of the successor trustee and choosing someone who is not properly trained.  Another mistake is to have a trust that may fit the needs of someone else, but not your situation.  It is very dangerous to create your own trust from a computer-generated "one trust fits all" form.  That is why it is important that your trust be properly drafted by an attorney concentrated in estate planning.