What Are the Pros and Cons of a Revocable Living Trust?
Estate planning isn’t always easy. There can be many options when it comes to laying out how you want your estate divided. One option is a living trust. A living trust is established before a person passes away, and spells out where a person wants their assets, investments, bank accounts, and personal property to go after they die.
However, because you are still alive when you create a living trust, you can name yourself as the trustee and remain in control of all your assets. What’s more, a revocable living trust not only allows you to remain in control of your assets but, because it’s revocable, can be canceled or changed at any time.
As with any form of trust, there are both pros and cons of a revocable living trust. Determining if one is right for you should involve a discussion with a trusted and experienced estate planning attorney. The North and South Carolina estate planning lawyers at Mullen Holland & Cooper P.A. can review your situation, talk with you about your goals, and recommend an estate plan that satisfies your wishes.
For more information on whether a revocable living trust should be a part of your estate planning portfolio, contact our office today.
Pros and Cons of Revocable Living Trusts
If you are having trouble deciding if a revocable living trust is right for your estate, consider some of these pros:
- Avoiding Probate – Probate can be a lengthy and time-consuming legal process. A revocable living trust can help your loved ones or beneficiaries avoid it altogether. A living trust will allow you to name a successor trustee who can oversee the management of the trust after your passing without the need for court oversight.
- Protections if You Become Incapacitated – A living trust can also protect your beneficiaries and assets if you become incapacitated for any reason. A successor trustee, selected by you, can assume control of the assets and administer them as outlined by the trust documents.
- Privacy – A revocable living trust also offers some measure of privacy. Since the assets in the trust do not go through the process of probate after death, there is no public record of the assets. This confidentiality can be valuable to families who value their privacy or who may have complex family dynamics.
Revocable living trusts aren’t without their disadvantages as well. You may also want to take into consideration these drawbacks:
- No Asset Protection – A revocable living trust does not protect assets from the reach of creditors.
- Administrative Work is Needed – It takes time and effort to re-title all your assets from individual ownership over to a trust. All assets that are not formally transferred to the trust will have to go through probate. Transferring titled property to the trust can take time and effort on the front end.
- Difficulty Refinancing Trust Property – A property that is held in a trust can sometimes be more difficult to refinance.
- No Tax Benefits – Despite a common misconception, a living revocable trust does not shield assets from either income taxes or estate taxes.
How Mullen Holland & Cooper, P.C. Could Help
There is a lot to consider when deciding if a revocable living trust should be a part of your estate planning strategy. As you ponder the pros and cons, schedule a consultation with an experienced North Carolina estate planning attorney.
At Mullen Holland & Cooper P.A., we can review your situation and talk to you about your goals. With this information in mind, we can craft an estate plan that can help you achieve your objectives while protecting your assets and your family. Contact us today. We can talk about the ways we may be able to help you.