Revocable Living Trusts and the Probate, Estates, Wills, and Trusts Lawyer Resource Center
for Attorneys and the general public, located in Washington DC and Maryland
Benefits of the Revocable Living Trust
Think of the Revocable Living Trust (RLT) as a separate legal entity,
like a corporation. You transfer title of assets into the trust, like funding a corporation.
While you are alive, you control all the assets in the trust, just like
you would if you owned all the shares of a corporation. When you die, your
trustee, someone you choose and trust, manages the trust for the benefit
of your children and other beneficiaries. Your children receive the money
only when you direct, so you avoid the problems associated with giving
immature children large sums of money outright. People who have chosen
to prepare an RLT and who have taken the time to put essentially everything
they own into it will greatly relieve themselves and their loved ones of
the problems of probate and asset guardianship. The Law Offices of George Teitelbaum, licensed both in DC and MD, can assist. To go to his main web site, which has lots of additional helpful information about estate planning, CLICK HERE .
According to state law, all assets "in" your RLT, that is,
which are owned by the Trust, will not pass through the "probate estate"
or be subject to the probate system upon your death. If you and your spouse
are acting as the Trustees of your own Trust and one of you becomes disabled
or incompetent, the other Trustee can easily replace the disabled Settlor
as Trustee without court-administered guardianship proceedings. This can
save the family a great deal of money, and reduce the stress and anxiety
associated with guardianship. A child or trusted friend or relative can
serve if you are unmarried or if your spouse cannot serve.
With a trust, you are not subject to the interference, delays,
publicity, and cost of the probate system. Planning with a trust can save
the average American family about $30,000 in probate fees, attorney fees,
and court costs alone, according to a national study by the AARP. The up
front cost of a trust is somewhat higher than a will, but the savings in
the end make the initial expense more than worthwhile.
Your RLT can provide you with the following benefits and advantages:
to Probate, your RLT:
Greatly reduces the COSTS of settling your affairs after death. An RLT
avoids probate costs, which range from 5% to 8% of the probate estate (more
if there is a Will contest);
Greatly reduces the time consumed in settling your affairs. It typically
takes 6 months to 2 years to complete the "probate" administration, and
a will contest can take over a decade. Your RLT can be settled in a matter
Keeps your private information private.
With probate, your Will and all of the related inventories and accountings
are made public by recording them at the local courthouse. Not so an RLT,
which is not a matter of public record;
Avoids a separate "ancillary" probate for out-of-state land. A separate
probate is otherwise necessary in the county where the land is located,
requiring out-of-state attorneys and court proceedings, increasing the
cost to your heirs, and usually adding to the delay;
Eliminates post-probate court control. The Trustee of a trust under
a Will must file accountings and motions with the court, whereas the Trustee
of your RLT acts independently;
Improves or preserves estate liquidity (cash availability) after death.
Less money is needed to pay for final settlements and cash is more readily
available to the family members;
Allows for smoother transition in business management. The Successor
Trustee can easily step into the shoes of the business owner without court
Is less open to attack from a disgruntled heir. The RLT, unlike a Will,
is not recorded with the court, and only proper beneficiaries need be notified.
Heirs who would like to better their position at the expense of your loved
ones never need know of your estate plans;
Eliminates the need for custodianship of your minor child s inheritance.
Under Maryland law, your minor child cannot receive any amount over $10,000
without the appointment of a court-administered fiduciary or custodian.
Your RLT will eliminate this requirement. If your minor children are beneficiaries
of your estate, you will have a trust one way or another; I counsel my
clients to choose the form of the trust and eliminate the judicial middle-man.
Compared to Court-Ordered Guardianship, your RLT:
Greatly reduces the costs of guardianship. Incompetency proceedings
are costly as lawyers are needed and evidence is admitted into court;
Eliminates the embarrasssment to your family. Incompetency proceedings
are open to the public and many times become the neighborhood gossip;
Avoids court interference in decision making. Your Trustee manages your
assets and makes decisions without the "assistance" of a judge;
Allows for easy return of the trust owner after recovery. If you are
disabled or otherwise unable to handle your affairs, your successor or
co-Trustee can step in until you can return to the position of Trustee.
This can all be accomplished without court permission.
Compared to A Power of Attorney, your RLT:
Provides certainty. More and more banks, brokers, and the like are refusing
to honor powers of attorney, are requiring onerous documentation before
they will honor them, or are requiring great specificity before they will
honor the power of attorney, to protect themselves against lawsuits. There
is no law that requires anyone to honor a power of attorney. A trustee
of a trust has greater power than an agent under a power of attorney because
the trustee owns the asset, as opposed to managing it for another person;
Can eliminate the requirement that you be found incompetant before it
Unifies your estate plan, by providing for a single document and individual
to make decisions for you;
Compared to Joint Ownership, your RLT:
Eliminates liability to the creditors of your co-owner. Most people
do not realize that, if your non-spousal co-owner (usually a son or daughter)
has financial trouble, the joint assets (ALL of them, not half) are subject
to the claims of your co-owner 's creditors. This can occur through bankruptcy,
divorce, or judgment (auto accident, for example);
Eliminates exposure to the bad faith of a co-owner. "He/she would never
do that to me" is, all too often, wishful thinking. I have handled cases
where children have stolen their parents very homes;
Simplifies your life. If you hold real property or titled personal property
(stocks, etc.) jointly, you could be required to get the signature of your
co-owner before you can transfer or sell the asset.
Your estate plan should be structured to minimize exposure
to probate fees and federal estate taxes. The Federal Estate Tax is usually
not the relevant issue for most people. Probate and asset management are
the most pressing issues. By its nature, an RLT avoids probate and provides
for superior asset management.
The educational information
provided here is only general in nature and is not intended as a legal
opinion. For specific advice or assistance, please contact a legal professional.
For those that need further legal
assistance, The Probate, Will and Trust Lawyer Resource Center provides an introduction into the District of Columbia and Maryland law practice
of Attorney George Teitelbaum, licensed
both in DC and MD. Check out George Teitelbaum's Legal Experience and Background, as well as office locations and other contact information. To go to his main web site Click here.
We offer a wide variety of estate and elder law services for clients throughout the District of Columbia and Maryland. Attorney George Teitelbaum also assists clients located out of state that may have legal issues in the District of Columbia.
Law Offices of George A. Teitelbaum
2416 Blueridge Avenue, Suite 200
Wheaton, MD 20902
(4 blocks North of Wheaton Plaza and the Wheaton Metro Station on the Red Line, right off Georgia Avenue, with easy and convenient parking only steps away)
1025 Connecticut Avenue, Suite 1012
Washington, DC 20036
(right next to the Farragut North Metro Station on the Red Line)
Probate and estate administration, estate planning, and elder law attorney George Teitelbaum provides representation to clients throughout Washington, D.C., in all areas such as Northwest, Northeast, Southwest, Southeast, George Washington University, Downtown, Dupont Circle, Foggy Bottom, Georgetown, Sheridan, Logan Circle, Mount Vernon Square, Shaw, West End, Barney Circle, Capitol Hill, Chinatown, Judiciary Square, Kingman Park, Navy Yard, Near Northeast, Penn Quarter, NoMa, Southwest Federal Center, Southwest Waterfront, Union Station, and the National Mall. Also, Suburban Maryland, including: Montgomery County, Prince George's County, Wheaton, Silver Spring, Rockville, Bethesda, Aspen Hill, Kensington, Gaithersburg, Olney, Leisure World, and Potomac. Attorney George Teitelbaum also assists clients located out of state that may have legal issues in the District of Columbia or in Maryland.