Phillips & Mille Co., L.P.A. | Attorneys And Counselors At Law

Call Our Firm Today At: 440-243-2800

Phillips & Mille Co., L.P.A. | Attorneys And Counselors At Law

Call Our Firm Today At: 440-243-2800

Helping Clients Through the Legal Concerns Affecting their Lives

The power of a living trust

If more Ohioans understood the capacity of a living trust (another term for a revocable trust) to plan for eventual transfer of their estates, these trusts would be much more sought-after. A living trust is straightforward to create but the steps are not automatic. Thoughtful homeowners and others with significant assets should not put off getting the necessary information about creating one or more trusts that may accomplish their estate planning goals.

Terms of a revocable trust are included in a document known as a declaration of trust or trust agreement. The grantor or settlor (alternative legal terms for the person making the trust) can change or cancel terms of the living trust at any time. They may also add more assets to the living trust whenever they choose. The grantor can be the trustee or the trustee may be someone else.

After the creation of a revocable trust, additional legal procedures are necessary to secure the benefits. For example, real estate that will be included needs to be retitled to the trust. By putting one’s home (and other assets, such as financial accounts) into a living trust, the grantor can retain control of that property during their lifetime, while facilitating a later smooth transfer of assets outside of the probate system.

Alternatives to living trusts that may accomplish the same goal of keeping assets out of probate include:

  • Joint ownership with rights of survivorship
  • Payable-on-death bank accounts designated for selected beneficiaries
  • Life insurance policies
  • Pensions with designated beneficiaries
  • Transfer-on-death designations for real estate, securities and automobiles

Each method of passing on assets outside of probate has advantages and disadvantages. Overall, many people with assets find revocable trusts to be satisfactory because of:

  • Privacy
  • Control
  • Lower costs than those associated with probate
  • Ease of transfer

Disadvantages include:

  • Effort needed to structure assets in line with a revocable trust
  • Costs to create and maintain the trust
  • Lack of court review or supervision of the transfer of assets, which may be disadvantageous when the trustee is not trustworthy
  • A possible need for a guardian of the trust in case the grantor/trustee becomes incompetent (although a financial power of attorney can overcome these circumstances)

A personalized review with an attorney of benefits, drawbacks, goals and opportunities is the wisest step forward for someone considering creating a revocable trust.