1. Immediate Access to Funds
Number one being immediate access to funds. Many people don’t realize that with using a will to dispose of their assets, they have to probate the will, so the original will has to be found, submitted to the court. An executor has to be appointed. Depending on the court, that might take months. Under state law, once the executor is actually appointed, they may not actually be able to make distributions from the estate for several months after they’re appointed. So when you hear about assets being locked up in probate or tied up in probate or an estate freeze, something like that, that is what they’re referring to. With a revocable trust, the successor trustee, who is someone you have named in your trust, does not need to wait for a court to appoint them. They have immediate access to their funds. They can make sure the bills are paid and the beneficiaries of your estate are taken care of immediately.
2. Efficient Administration of the Estate
Number two, smooth, efficient administration of the estate. For the same reason where you have assets that were under your control during your lifetime, and then there’s essentially everything is being locked up while you’re waiting for probate, and maybe the estate is actually sort of falling apart frankly after you die. For example, what if you have a house that’s in your name and a mortgage. You’re providing to your will for your spouse to take title to that house, but they can’t actually pay the mortgage because all the assets are tied up in probate matter. With a revocable trust, if you have a trustee who’s able to act immediately, the house is already owned by the trust, the revocable trust can actually pay all the bills, including the mortgage, property, taxes, insurance, that sort of thing, and make sure that your spouse is able to continue to live in the marital home without any interruption and no problems with the bank and asking for money. The spouses don’t have to ask for money from their family while they’re waiting for probate to clear or anything like that.
3. Privacy
Number three, privacy. A lot of people don’t realize that probate matters are generally under state law, cases of public record, and so a will which is filed in order to get probate is also a public record, which can be obtained by anyone who goes down to the town clerk or the county clerk, or the probate court, surrogates court, whatever it may be referred to, and get a copy of that will. Moreover, now that matters are generally being e-filed, people who have access to e-filing systems can obtain them electronically from anywhere in the country, anywhere in the world. Wills oftentimes identify the decedent’s name, their family members. They might have private matters that they would prefer not be disclosed publicly. A revocable trust oftentimes is kept confidential and oftentimes doesn’t even need to be filed with the court.Typically, you can simply use a certification of trust in order to establish that there is a revocable trust in effect, and that there is a trustee who is actually serving as such. That keeps the terms of your trust and all your private family information private.
4. Potential Cost Savings
Another reason is potential cost savings. As I mentioned before, with a revocable trust, you don’t have to probate necessarily. You may not even have to do any sort of probate of the will if you are actually able to put all of your assets during your lifetime into a revocable trust. The process of transferring assets into your trust might actually save you quite a bit of money compared to probating. Oftentimes, however, people do need to actually probate the will and get an executor appointed to handle some assets in the estate or some matters of estate administration that cannot be addressed under a revocable trust, so I don’t want to overstate it.
Oftentimes, you do have to have some probate expenses. That said, if you have, let’s say, a second home in another state, so you have a decedent who lived in New York City and they had a vacation home on the Cape in Massachusetts. Normally, if they had all their assets disposed of under a will, they would have to have a probate proceeding in New York State first to handle all their assets, and then they would have to have an ancillary probate proceeding in Massachusetts in order to transfer title to the summer house. If you had a revocable trust and put both houses, retitled them into the name of the revocable trust, you don’t have to do probating in both states and maybe not any state.
5. Less Need for Continuing Judicial Oversight
Finally, there’s less need for continuing judicial oversight. A lot of people don’t realize that if you have a trust for your spouse or your descendants, that’s under a will, that’s what’s called a testamentary trust. A probate court will have continuing jurisdiction over that trust basically, as long as the trust lasts under most state law. So if you need to change trustees, if you want to have any sort of accounting matters that need to be resolved with the trust, you’re going to have to have that approved by the probate court. That’s expensive and time-consuming and incurs a lot of delays. If you have the same trust created and disposed of under the terms of a revocable trust, lifetime trust, you’re not going to have that continuing oversight by the probate court. It saves you money, saves you time, makes life a lot easier for your family.
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