Estate plans with revocable living trusts can, if properly created and implemented, allow you to avoid probate and, by doing so, save time and money, and protect your family's privacy. Unlike other probate-avoidance plans, though, a plan with a living trust can do more, including protecting you from the potential takeover of your assets through an unwanted guardianship/conservatorship. Additionally, a living trust plan can make the process of updating your plan potentially easier and more efficient than it would be with other plans designed to avoid probate.
If you've done much exploration into the issue of estate planning, you have probably heard about the goal of avoiding probate. When it comes to discussions of avoiding probate, two of the major advantages of achieving that goal are the time savings and cost savings that can be realized if you successfully avoid probate. But, for those people who create an estate plan that includes a revocable living trust, their plans have the potential to achieve these worthwhile benefits, but also do much more.
Like any plan that avoids probate (such as a plan centered around transfer-on-death designations or joint-tenancy-with-right-of-survivorship (JTWROS) ownerships), a plan built around a living trust can, if properly created, funded and maintained, allow the plan creator to avoid probate. By doing so, you can achieve many benefits. Probate procedures sometimes can be very expensive and can be extremely time consuming. Additionally, probate administrations are court processes and, therefore, are matters of public record in most situations and most places. If you avoid probate, you have the potential to save time, save money and protect your family's privacy.
But a plan with a living trust can do much more. It can help make your plan more organized and make dealing with changes in your life easier to address when it comes to your estate planning. Say, for example, you recently got divorced. If your plan is built upon using transfer-on-death asset designations, then you'll need to be sure that you change each asset where you had you ex-spouse as the death beneficiary. That usually means going to each institution where that asset is held, getting that institution's specific change form, filling it out and submitting it. As several courts have recently ruled, changing your will does nothing to affect these accounts. Only a properly completed and submitted change-of-beneficiary form will make the change you want take effect. Multiply that process by the number of assets that need to be addressed and you have the possibility for quite a chore. By contract, with a trust, it is possible that a single trust amendment document could, by itself, completely update your plan and make the changes you want in the wake of this divorce.
Your living trust also has the potential to protect you from unwanted and unnecessary guardianship/conservatorships. If someone were to attempt to obtain a guardianship/conservatorship over your assets, and you had already created and funded a living trust, that person would not be able to grab control of your assets. Control of your assets would instead shift the person you named as your successor trustee in living trust document. Plans built around JTWROS ownership and/or transfer-on-death designations would not afford you this type of protection.