When one creates an estate plan, a “simple” Last Will and Testament (LWT) is frequently the document that first comes to mind. The concept of creating and funding a trust, specifically a Revocable Living Trust (RLT), may sound daunting. Yet, there are many advantages to using an RLT. Below are 3 key reasons why an RLT is an excellent vehicle to plan for your future.
(1) It Gives You Control
With an RLT, you can be both the creator and the trustee. You maintain full control over the assets in the trust during your lifetime. As the circumstances of your life change, you can amend your RLT (e.g., change who the beneficiaries are), remove or appoint successor or co-trustees, and/or revoke the trust at any time. The assets in the trust remain taxable to you personally, and real property in the RLT will get a step-up in cost basis to fair market value as of your date of death, thereby reducing or eliminating capital gains consequences for your beneficiaries.
(2) It Avoids Probate
If you die with assets titled to your name alone, they cannot be distributed to your beneficiaries unless and until your LWT goes through the probate process (which is public record) in the Surrogate’s Court. The simplest proceedings take approximately a year, and often, they take much longer as complications, court delays, and family issues arise. If you own real property in another State, you may need an ancillary probate as well, which only adds costs and complexities to the equation.
Since assets titled to an RLT don’t require probate, the RLT offers a quicker and simpler way to distribute your estate at death. Within the RLT, you would designate a co-trustee or successor trustee (e.g., a trusted family member or friend) who would distribute your assets according to the RLT’s terms without the need to go to Court or any mandatory waiting period. An RLT, being a private document, is also more difficult to contest than a LWT.
(3) It Prevents Bank Delays
It’s crucial to have a valid durable general Power of Attorney (POA), with broad gifting powers, which designates an agent to manage your personal affairs and finances should you become mentally incapacitated. However, your agent may encounter delays in having the POA reviewed by each and every financial institution that holds your assets. When the majority of your assets (i.e., any real property and improvements and liquid non-retirement assets) are under the RLT’s umbrella, it is typically quicker and easier for your co-trustee or successor trustee to step in on your behalf and take action when needed.
As we enter 2026, it is important to keep in mind that an RLT is not just for the wealthy—it is a time-saving, cost-effective tool that can be used by individuals of all income brackets, as part of a simple or complex estate plan, that offers privacy, flexibility, and control.
