I often hear the assumption that people do not need a trust unless they have $1,000,000. This is not true. A Revocable Living Trust is an estate plan. The trust is a Will substitute. Instead of having a Last Will and Testament as your estate plan, you can have a Revocable Living Trust.
The purpose of a Revocable Living Trust is to avoid probate. Often my clients have more than one piece of real estate, and sometimes in more than one state. By setting up a trust, they not only avoid probate in Maryland, but also in other states where real estate is owned. The real estate could total less than $1,000.000.
Some of my clients are setting up their trusts because they have young children or special need beneficiaries. They want to simplify the administration when they die, so there is no time delay in distributing their estate. They want their assets readily available to these beneficiaries.
Often I have clients who are creating a trust because they wish their estate plan to be private, or to decrease the risk of someone attempting to challenge their plan. There is no right to inherit, and many clients do not want to leave their money equally to their children. Have you heard the term “Will contest”? A trust is a valid legal document upon creation which makes it more difficult to contest.
In other cases, many of my clients are setting up a trust for estate tax planning purposes. Tax planning can be done through a Living Will and Testament, but with the trust a surviving spouse does not have to go through probate to carry out the estate tax plans.
As you can see, there are many different reasons to set up a trust, but most often it is to avoid probate and for maximum control of your assets. This is not to say that a Last Will and Testament is not a valid estate planning tool, however it is not always the most comprehensive estate planning choice.
Sinclair Prosser Gasior conducts seminars throughout the year that illustrate the use of a Will versus a Revocable Living Trust. The seminar provides real life examples of how each of these estate planning tools plays out in different family scenarios. For more information on the date, time and locations of our estate planning seminars, visit https://spgasior.com/local/estate-planning-seminars.aspx
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