Wouldn’t all parents prefer that their children avoid the hassle, delay and expense of probate court in favor of a much more efficient and effective way of receiving an inheritance? Many parents have asked us lately about adding a revocable living trust to their estate plan.
How Can my Kids Avoid Probate Court?
A revocable living trust is a powerful estate planning tool that offers all the benefits of a will and much more, without some of the drawbacks, such as probate.
A revocable living trust allows you to maintain control of your property in a more flexible manner. You can add assets, such as a home or stocks, to the trust while still living in the home and buying or selling stocks or other property at any time you like. You can add or subtract assets from the trust at any time or change the terms of the trust at any point during your life. The trust can grow with you and your family through whatever changes you experience.
Unlike a will, trusts do not require the sometimes lengthy and costly probate process. A trust can be executed immediately while the probate process may take several months to several years. The cost of probate increases with the length of the process. Probate fees can include court costs, bond fees, appraisal fees, executor’s fees and attorney’s fees.
Why is the Probate Process So Difficult?
One of the main reasons for a lengthy probate process is family disputes over the will. If you think that your family members will not agree with how you wish to distribute your assets, you should consider a revocable trust. Probate is a public process meaning that anyone who could have a claim to your estate can petition the court for that right — even estranged family members. Alternately, trusts are private, allowing you to maintain closer control over who receives what.
Disputes arise for many reasons. You may have a blended family. If you have children from a previous marriage, you may want to use a trust to protect their interests. Or you may want to divide your assets differently depending on whether your heirs are his, hers or ours.
How Else Can a Revocable Living Trust Help Me?
You may have children who are not responsible and mature enough to handle an inheritance. If your children have money management, gambling or substance abuse problems, a trust can be a way to slowly distribute their inheritance so they do not squander it or provide an incentive for them to live responsibly.
Or, you may have elderly parents for whom you would like to provide if anything should happen to you. A trust can help you allocate assets for both older and younger generations.
If you have minor children or a child with a disability you may want to establish a trust to make sure that whoever you appoint as guardian will have the funds to provide for your children immediately in case you die or become incapacitated. If you only have a will your guardian may be given an allowance during the probate process, but it might not be enough to provide for your children.
Once you die, the trust becomes “irrevocable,” or unchangeable, ensuring that your wishes are fulfilled. A trusted estate planning attorney can help you establish a revocable living trust that meets the particular needs of your situation while helping your loved ones avoid probate court.