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Asset Administration
A Trust established and funded during life may appoint any person as Trustee to administer the Trust assets including the individual establishing the Trust. For individuals who wish to have control over their assets during life but later become incapacitated, a successor Trustee may be appointed. This avoids the problems and costs associated with the Court-appointed Conservator to administrate an incapacitated person's assets.
Probate Avoidance
A Trust, properly funded, transfers or controls a person's assets after death without the need to probate the assets. The philosophy behind a Revocable Living Trust is that all of a person's assets are held in the Trust and the person actually owns, in an individual capacity, no assets. Therefore, there is nothing to probate.
Asset Administration After Death
A person may create whatever limitations and restrictions desired for the use and disposition of Trust assets after death. The Trust may continue to operate a business, agricultural interests or other management required interests. Income or Trust principal may be used for supporting or educating family members or individuals who may not be financially responsible. The Trust may ultimately pay out (terminate), thereby giving the beneficiary unfettered control over their assets, as the beneficiaries reach an age where they are financially responsible, graduate from college, or pursuant to some other criteria.
Avoids Publicity
A Trust, unlike a Will which is probated, does not become a matter of public record. However, a contested Trust may become a public record so long as the court files are open to public inspection.
Estate Tax Savings
Through use of special language in the Trust and the creation of an additional Trust or Trusts within the same document, substantial Estate Tax savings may be achieved in estates which may bear such a tax.
Irrevocable Trusts
Trusts set up during a person's lifetime may be used to obtain current charitable deductions or may be part of a gifting program enacted to reduce a person's estate for minimizing Estate Taxes, yet restricting a beneficiary's access to the Trust funds as you desire.
Life Insurance Trusts
A Life Insurance Trust may be used to fund a large estate with the cash necessary to pay Estate Taxes. This may avoid the necessity of selling property at "fire sale" prices to pay these taxes. In addition, the Life Insurance Trust, if set up properly, may provide leveraged dollars which appreciate income tax and estate tax free to ensure the largest amount possible will pass to the Trust beneficiaries after death.
Contesting the Will
Generally, a Trust is more difficult to contest than a Will. A Will is contested during probate where a Trust requires a new and independent lawsuit to contest its validity. An Attorney is generally required to contest a Trust due to the complexity of this type of lawsuit, whereby a person may contest a Will by filing a form document with the Probate Court.
Most Important, Peace of Mind
Although this advantage cannot be measured in dollars and cents, when the Estate is in order an emotional load is lifted from the person who is concerned for his or her family's well-being and future.
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