By Salvatore M. Di Costanzo
In certain circumstances, a revocable living trust must be strongly considered. To determine if a revocable living trust is an appropriate necessity, one must first understand its purpose. Unlike a Last Will and Testament (“Will”), a revocable living trust does not need to be probated upon one’s death. Probate is the legal process of going to Court to prove that the decedent’s Will is valid, culminating in the appointment of an executor. Many people do not realize that an executor named in a Will has no authority until the Court officially says so. Generally, if one dies having a Will and with assets in their sole individual name without beneficiary designations (i.e., outside of those specified in their Will), their heirs will be subjected to the probate process.
A revocable living trust avoids probate. Some practitioners, citing the length of time it takes, legal fees, filing fees, and relative ease for beneficiaries to contest a Will, will argue that probate must be avoided at all costs. Others vehemently oppose revocable trusts, arguing that probate is not all that bad and most people who implement revocable living trusts neglect the trust’s formalities, resulting in an unintended probate proceeding. The truth lies somewhere in between. Setting aside these opposing viewpoints, there are instances when one must consider a revocable living trust so that probate is avoided.
The classic example is where one owns property in more than one state. If one dies owning property in New York and Florida, we must first probate your estate here in New York and then hire an attorney in Florida to probate in Florida.
Families with minor and/or disabled children should absolutely be thinking about avoiding probate. In both instances, significant consideration should be given to leaving assets to minor children in further trusts and, if there are disabled children, to a special needs trust. Implementing and administering these trusts by Will and through a probate proceeding is extremely cumbersome, as ongoing Court intervention will likely be required for many years, if not decades.
While there are other instances where probate should be avoided, the message here is that no estate plan is one-size-fits-all. Revocable living trusts are necessary if you have the right fact pattern. I can be reached by e-mail if you would like to discuss your own situation.