• A trust facilitates the smooth transfer of real estate, avoiding the delays and complications of probate. Without a trust, the court-supervised probate process can tie up assets for an extended period.

Extended Court Hassles:

• Probate is an expensive and somewhat complex process, involving inventory, appraisals, notifications, and debt settlements. This can take 9 to 18 months or longer. Trusts streamline this, saving time and minimizing court-related delays.

High Probate Costs:

• Probate expenses, including legal fees, can be steep and are calculated as a percentage of the estate’s value. Trusts generally incur lower fees, making them a more cost-effective option.

Frozen Assets During Probate:

• Wills freeze assets during probate, causing delays in paying bills and expenses. Trusts avoid this freeze, ensuring that funds are available for immediate expenses.

Inheritance Tax Exposure:

• For estates over $5.4 million, inheritance taxes apply. Irrevocable trusts can offer protection. Establishing a trust can be a strategic move for those in this tax bracket.

The Benefits of a Revocable Trust:

• Direct Asset Transfer:
  • A revocable living trust allows control and enjoyment of assets during the individual’s lifetime. At death, assets transfer directly to beneficiaries without going through probate.
• Privacy and Control:
  • Unlike wills, trusts remain private, shielding family matters from public records. Trusts provide a level of control over asset distribution, protecting against potential family conflicts.

• Creditor and Predator Protection:
  • Trusts prevent assets from being used to pay beneficiaries’ debts or becoming subject to claims from divorcing in-laws. This safeguards assets for intended beneficiaries.

Establishing and Managing a Revocable Living Trust:
Retaining Control:

• Grantors maintain control over their assets as long as they are mentally competent. Control transitions to a secondary trustee only when the grantors choose to relinquish control or lose mental capacity.

Funding the Trust:

• Assets, including real estate and investment accounts, must be retitled into the trust for it to be effective. Proper funding ensures the trust’s ability to bypass probate.

Periodic Review and Modification:

• Revocable trusts can be amended or restated based on changing circumstances, ensuring they align with evolving preferences, family dynamics, and legal requirements.

Getting Started with Estate Planning:

• Options for Estate Planning:
  • Individuals can choose do-it-yourself (DIY) methods, online will creation services, or consult trusts and estates attorneys. Each option caters to different needs and complexities.

Hiring a Trust or Probate Attorney: 

• Choosing an Attorney:
  • Recommendations from friends or other lawyers can help find a suitable trusts and estates attorney. Compatibility, experience, and communication style are crucial factors.
• Fee Structure:
  • Attorneys may charge hourly rates or a flat fee for services. The cost depends on the estate’s complexity. Clear communication about fees and services is essential.

• Homework and Information Gathering:
  • Attorneys often provide worksheets to identify goals, address issues, and collect estate data. Accurate and complete information ensures effective estate planning.
• Minimizing Estate Taxes:
  • Consulting on strategies to minimize estate taxes may incur additional fees but can significantly benefit high-net-worth individuals.

• Multiple Drafts and Communication:
  • Wills and trusts may require multiple drafts to ensure they align with the individual’s wishes. Clear communication with the attorney is crucial for satisfactory outcomes.
• Regular Review:
  • Periodic reviews, ideally every five (5) years, help ensure that estate documents remain current, considering changes in laws, family situations, and asset values.

Conclusion:

Understanding trusts and their benefits is essential for effective estate planning. Whether choosing a revocable living trust or other options, seeking professional advice, periodic reviews, and adapting to changing circumstances contribute to a comprehensive and successful estate plan.