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#1 Reason for Using a Revocable Living Trust

Posted by Neil Tyra | Oct 02, 2018 | 0 Comments

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.

About the Author

Neil Tyra

Noel's Husband, Bernadette's Dad, Clark's Father – My Three Best Roles So who am I and what am I about? First I was Noel's husband. I'm married (38 years and counting) to a long time resident of Rockville whose family goes back three generations.

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