A potential client called me one day and said she needed me to draw up a revocable living trust for her. “Why do you need that particular document?” I asked. “Oh, [insert name of TV pundit] says you must have a living trust to avoid probate.” “And why do you have to avoid probate?” I asked in response. “Because [pundit] says probate is a nightmare and you should avoid it at all costs.” I asked the woman if she had ever dealt with probate (“no”) and how many probate [TV pundit] had ever driven (none, since she is not a lawyer). I assured the person she called that she had a lot of experience with probate, that it is not the “nightmare” some would make it seem, and that living trusts are not for everyone. However, the lady was adamant about the trust, refusing to listen to me explain why the trust might not be good for her, or address her legal needs, and hung up on me.

I don’t like losing potential clients, but if they don’t at least listen with an open mind and discuss these heady legal issues with a professional who has experience in this area, then they may not be a good client. The truth is, I would have gladly drafted a revocable living trust for her, since I would have made more money doing that than traditional estate planning, but before doing so, I wanted her to understand all the ramifications of using this legal tool. . She wasn’t interested in hearing what she had to say, and she thought of moving on. This was fine with me.

Revocable Living Trusts (RLTs) have gained superstar status in some circles in recent years as a way to avoid probate. It is true, they help to avoid succession. Yes are configured and managed correctly. They also help avoid guardianship proceedings (more on that in a moment). But what many people don’t understand is that a living trust often creates more problems than it solves: for example, the costs of setting up the trust, transferring all assets to the trust, and continuing to maintain the trust properly throughout life. of the grantor. often costs at least as much as probate, if not more. I often say to clients, “Why should I your Pay your estate administration expenses? Why don’t you enjoy your money while you’re alive and let those costs count toward what your heirs get later?” Because the truth is, there’s no free lunch. Someone is going to pay to transfer your assets to your heirs. .

Also, in my experience as an estate planning attorney who also manages estates, most of the revocable living trusts I have dealt with have No led to a complete avoidance of succession. This often occurs because, as time passes, the grantors forget to title the new assets in the name of the trust. After death, when the grantor’s family seeks my advice to liquidate the trust, there are assets that did not make it into the trust and we still have to file probate proceedings. So what problem did the trust solve?

RLTs help avoid guardianship proceedings, but there are problems in this area as well. While the trust appoints a designated person to take over the finances in the event the grantor can no longer make decisions, there is no day-to-day oversight of the work they are doing. The only way to enforce or require proper performance is to initiate expensive legal proceedings. The guardianship procedure, on the other hand, is regularly examined by the court system at a lower cost.

In short, whether a revocable living trust is right for you is something you should discuss with your attorney. Keep an open mind and explore all your options with a member of your state’s Bar Association, preferably someone who regularly practices law in this area.