*Revocable Living Trusts are typically used as Will substitutes to avoid probate and create a very systematic transition of your estate to your beneficiaries.
There are many benefits of using a living trust versus a Will and probate to administer your estate.
First and foremost a properly created and funded living trust avoids probate, which is a legal process required to administer a Will and give the personal representative the power to act on behalf of the estate. Probate in some states such as California is tedious and very expensive to administer with fees based on a statutory structure based largely on the value of the assets in the estate. Administration of your estate within a trust avoids that expense and court involvement.
Second, if you own certain assets such as real estate in more than one state and you have a Will, your estate will have to be probated not only in your domicile state, but an ancillary probate may be necessary in each state where you hold those types of assets. If all your assets are properly placed in your living trust, all probate actions are avoided. Third, the procedures for probate vary from state to state, but at a minimum require a probate action be commenced and a probate file opened with the appropriate court of that state. While most states allow for administration of the estate without court oversight, the process does usually require the filing of the Will, inventory of assets, notice to and list of creditors and other personal type information in a file that is available for viewing by the public. Administration of your estate through a living trust is completely private and protects the privacy of certain confidential information.
Finally a living trust is often easier for the successor to administer because a trust is typically funded with your assets while you are alive. As a result, there is no need to locate and transfer assets at the time of death which is often necessary when you have an estate subject to probate. That provides for a simpler transition at death when your family is otherwise dealing with the details of a funeral and the emotions of the loss of a loved one.
Under the law in most states, there are procedures that allow the termination of creditors’ claims for the administration of trusts in the same manner and to the same extent as is available through the probate process. Additionally, you can accomplish the same income tax, estate tax and legacy planning under a living trust as you can under a Will.