The Advantages of Planning with Revocable Living Trusts - Keston Law - Wilmington, NC
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The Advantages of Planning with Revocable Living Trusts

Posted Apr 2, 2018 by Joan Keston

There are many reasons why using a revocable trust-based plan may be more
advantageous than planning with a last will and testament to distribute your estate at
your death. Many people are opposed to doing a trust, but the advantages can
greatly outweigh the burden of having a trust.

It is extremely important that you transfer your assets into the trust, which process is
called "funding the trust." Many people have a trust, but have not transferred their
assets into the trust, with the result that the trust is ineffectual.

These are some of the reasons why we might advise having a Revocable Living Trust:

  • Wills operate at death and can be changed by an individual at any time until then.
    Unless there is a trust within a will, called a testamentary trust, the will does not
    control distributions beyond the circumstances that exist on the day of death.
    Revocable trusts operate once executed, can be changed at any time until death
    and can control distributions beyond death.

  • Revocable trusts provide families with privacy at death. Unlike a will, a trust is not
    public record. Instead, trusts are private contracts that can act as significant
    asset-protection tools.

  • Revocable trusts provide asset protection in 2 scenarios that are of particular
    concern.

    • We can do a trust for your children such that their spouses would not have access to their inheritance in the event of a divorce, or the death of your son or daughter. In addition, if your son or daughter passed away before they spent the inheritance, we could leave his or her inheritance to your grandchildren.
    • We can do a trust to provide asset protection if a spouse dies, and the surviving spouse remarries. In that way we can protect the inheritance of the children of the first marriage.
  • Revocable trusts help families avoid high court costs associated with probating a
    will. Those with a probate estate of $1 million or more can expect court costs of
    $6,000. The court costs in a probate for one person can be more than the cost of
    paying an attorney to draft a revocable trust, which will allow a couple to avoid
    these fees at the death of each spouse.

  • Planning with a revocable trust can help families in a variety of situations, such
    as those who have special needs children, those who have children with alcohol
    or gambling addictions, or those with children who do not manage money well. In addition, you can leave your assets in trust to a child who receives government
    assistance without upsetting his or her benefits.

  • Revocable trusts are particularly helpful if you own property in another state, as
    putting your assets inside a trust will allow you to avoid probate costs in both
    states at your death. Without a trust, you may be forced to pay high probate fees
    in any state in which you own real estate, in addition to those fees that you must
    pay in North Carolina.

  • Revocable trusts can prevent your family from overcoming the planning that you
    put in place. North Carolina General Statutes provide multiple ways for family
    members to challenge your will. To avoid this, we draft trusts that contain a “no
    contest” clause, which prevent family members from inheriting if they challenge
    your trust.

  • Unfortunately, a revocable trust does not provide protection from creditors while
    you’re still alive, as it is an agreement that you created for the benefit of yourself.
    Since you have the right to change this type of trust, your creditors can access
    your assets during your lifetime. However, at your death, your revocable trust can
    provide asset protection for your spouse and your children.

If you have questions about revocable-trust based planning, Medicaid, or Veterans
benefits, consider Keston Law – we offer a unique blend of Asset Protection, Elder Law
and Estate Planning. You can also attend our free seminars, learn more through our
website at www.kestonlaw.com, or call us at (910) 509-7121.