Advantages of a Revocable Living Trust
There are other good reasons to establish a Revocable Living Trust – but those are the most important in my mind.
The next thing you need to know is how exactly you want to divide up your estate after you die. You want your home to go to someone, your bank account funds to go to someone, your car to go to someone, etc. You might have a wife or girlfriend or brothers or sisters or cousins or friends or favorite charities, etc. Only you can decide who gets what – that is the whole point of this entire exercise … so that the bulk of your estate goes exactly where you want it to!
For a revocable living trust, you will also need to choose a successor trustee – someone you trust who will essentially administer your estate after your death. This was a difficult decision for me – because all my friends are very busy people … and I didn’t want to burden them with a big obligation after my death. In other words, I didn’t want my memory to be clouded by how much of a pain in the ass it was to distribute my estate to various parties. What I did was choose to name the attorney who is handling my revocable living trust as trustee. This is an expensive thing to do – as this attorney charges $275/hour … but I did ask him to cap his fees, and we were able to agree on an amount equal to a certain percentage of the value of my estate.
Speaking of attorneys, you need to choose an attorney to draw up the revocable living trust. You want to choose wisely here – and be certain that the attorney you work with specializes in estate planning. Your best bet is to use an attorney that someone you know well recommends … that they have had a good personal experience with. You also want to have an idea how costly your attorney will be. The most expensive attorneys are typically the ones that work in large legal firms. You can often get a better deal from a small law office. I have been quoted prices for identical work on the establishment of a revocable living trust for as low as $750 at one firm, to $5000 at another large firm.
Once you have done everything I describe above (figure out your estate net worth, determine who you want to leave what to, pick a successor trustee, pick an attorney) then it is time to make the appointment with your new estate planning attorney, and get things started. The more detail you have with regard to what I’ve described, the faster the entire process will go. Your estate planning attorney will ask you a lot of questions, and you will need to give him or her a precise listing of everything … including account numbers, institution names/addresses/phones of where those accounts are held, etc. Your attorney then creates the trust, a “pour-over will” (which wills anything not already in the trust into the trust), and possibly an “advanced healthcare directive” (which I’ll save an explanation of for a different article). Continued on next page >>>
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