Revocable Living Trusts are extremely useful in the following cases:
- Client is Over the Age of 75 or in Poor Health
There is no better way to manage assets through a period of mental or physical disability than with a revocable living trust. The trust provides for lifetime, disability and post death distributions. The trustees are “at the ready” and the client’s assets are consolidated in one place. The next best option is granting trusted family members, friends or an advisor a Durable General Power of Attorney. This document expires at the client’s death, however. The Revocable Living Trust provides for continuity after death.
- Any Risk of Will Contest
Where there is any risk of a Will contest such as a disinherited family member or a same sex couple with unaccepting family members, the revocable living trust, pre-funded during life, to a great extent protects the estate from a challenge. The most common challenge in Will contests are based on undue influence or mental incapacity both of which are not present (or extremely difficult to prove) when a client works with an estate attorney to establish and fund a revocable living trust. The sort of funding transfers and collaboration needed in the revocable living trust planning process would bring any such problems to light.
- Clients with a Net Worth of Greater than $20 Million
For higher net worth clients, often with multiple residences, it makes sense to avoid ANY delay in distributions after death. These clients can consolidate bank and brokerage accounts in one place to have a coordinated estate plan. Any delay in probate and the required court appointment of executors and trustees could subject the estate to stock market swings. The Trustee of a Revocable Living Trust would already be in place and could act quickly to re-allocate or liquidate assets.