#1 Reason for Using a Revocable Living Trust

Clients often ask whether or not they need a Revocable Living Trust (RLT)
or if a Will is sufficient for their estate planning needs. While there are
several benefits to having an RLT, there is one primary factual reason to
have an RLT beyond just the benefits it provides. That is, do you own real
property in more than one state?

This happens all the time here in Maryland when the client owns a home
here locally and one say at the beach in Delaware. Without an RLT, should
that person die their family would have to open two estate proceedings:
one in Maryland and one in Delaware. But with an RLT, that would not be
necessary. As we have noted before, RLTs are private and the estate
governed by them is not handled through the probate process but rather is
a private matter beyond the scope of the court. In a typical RLT, the
creators or grantors of the RLT, would retitle ownership of the property in
the name of the RLT itself rather than the grantor’s name. This is known as
funding the trust. So in the above scenario, the Maryland house and the
beach home would both be retitled in the name of the trust. In that way,
only one document governs and the client has avoided having to open an
estate in each state in which property is owned.

This scenario is the most straightforward and clear example of when an
RLT might be more appropriate for estate planning than simply using a Will
alone. Lots of other items can be retitled to the RLT. Some are rather
straightforward and others can have more significant restraints or
requirements associated with doing so. As always, it is better to consult an
experienced trusts and estates attorney regarding the wisdom and
limitations associated with using a RLT.

Written by The Tyra Law Firm

Our firm offers a number of legal services, including Family Law, Estate Planning,Elder Law/Medicaid Planning, and Personal Injury. In each of our practice areas, we are committed to paying close personal attention to every detail, and providing excellent client service.