Are trusts only for the rich? No — there are a lot of benefits to including a revocable living trust in your estate planning. They can address some very common situations which otherwise may require a trip to the probate court for one reason or another.
The living trust is one estate planning vehicle that can provide value to anyone who wants to avoid the delays, costs, and publicity that accompanies a probate case. For example:
For people who own real estate, holding it in a revocable trust will make it a non-probate asset. Otherwise, a probate proceeding in court may be required to transfer the real estate to an heir. And for those who live in Illinois but own real estate out of state, having a revocable trust to administer the real estate can potentially avoid the need for ancillary probate proceedings in the other states.
If your family includes minor children, a living trust can hold the funds and provide limitations on how the trustee should spend them. That way, you can be sure the monies would be spent on the actual needs and care of the children, and not put to other purposes that benefit the trustee as much if not more than the children.
When the family includes a person with a disability or special needs, a living trust similarly can be used to set aside funds for his care.
Of course, administering assets also is a use of the living trust, but it is not necessarily a prerequisite. Any one or more of the other factors may make implementing a living trust worthwhile.
Because they can offer security, continuity, and some protection and control against the dissipation or misuse of the assets they hold, the revocable living trust is a tool that should be considered by families who are still building their net worth.