The Revocable Living Trust

Death and the Probate Court.  Imagine that a person dies leaving property in his or her name.  It could be any property - real estate, bank accounts, stocks, bonds, etc.  Since the deceased is gone, who is going to sign over these properties to the beneficiaries if you have a will (or you have no will or trust)?  If you guessed the Probate Court, you’re correct.  In fact, that is one of the main functions of the probate court – to administer estates of deceased persons and transfer the property to those entitled.

But to do this, the Court is required to follow a number of procedural safeguards to make sure that everyone that has an interest, or potential interest, is given notice and a right to be heard.  And these safeguards have to take place before the Court signs over property to anyone.

These safeguards include, to name just a few, petitions, notice to heirs, inventories, appointment of a Personal Representative, notice to creditors, newspaper publications, hearings, challenges, interim orders, and accountings.

Depending upon the size and complexity of the estate, you can imagine that bringing some estates to closure may take some time and expense.  Others may be more expedient.  In most instances however, there is enough complexity involved that attorneys are hired to assist in the proceedings. The sum of all of this procedure is generally referred to as probating the estate.

A Popular Alternative.  Now imagine a single document that you can sign that generally will not involve probate court - a document that allows you to exclusively control your property while you are alive, yet gives legal authority to a person you trust to not only handle your affairs and property while you are incompetent, but more importantly, to transfer your property to whomever you direct, under any conditions you direct, after you are deceased.  In essence, you become the probate court (your own judge), and the person you choose to succeed you (usually a beneficiary), gets to sign over your property as you direct - the same as would the judge.  In short - no court.

Enter the Revocable Living Trust!

Yes, this document does just that!  In fact, one of the most attractive features of the Revocable Living Trust, for both modest and large estates, is the avoidance of Probate Court.  And while this article points out that feature, it must be emphasized that there are numerous other features and considerations that can be addressed through the Revocable Living Trust.  These include for example, provisions relating to estate tax, gift tax, family trusts, trusts within trusts, special needs trusts, etc.  Such considerations are too numerous or too in-depth to address in this article.  But their existence is generally mentioned to emphasize the availability of a vast array of potential uses of the Revocable Living Trust depending upon the complexity of the client’s intentions and the size of the client’s estate.

How does it work?  Well generally, most people set it up so that they are their own trustee while they are alive and competent.  During these times, they can do anything they wish with their assets.  After they are deceased, or become incompetent however, a successor trustee takes over that must do with the property as they direct in the language of the trust.  And, you can direct what is going to happen to your property in about as many ways as you can imagine – all handled privately, and for many people, all within the family. 

If you are considering an estate plan, contact the offices of Tyler and Tyler, P.C. at (989) 362-8668 and consult with one of our attorneys.

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