Importance of a Revocable Living Trust

A Revocable Living Trust is a legal document that allows you to transfer your assets into a trust during your lifetime. You maintain control of the trust and can change or revoke it at any time. Upon your death, the trust assets are distributed to your beneficiaries without going through probate.

A properly funded revocable living trust can generally avoid probate for assets it holds - the court-supervised process of distributing a deceased person's assets. Probate can be time-consuming, expensive, and public. However, the trustee still has administration responsibilities after death, distributions may take time, and disputes can require court involvement. Avoiding probate also does not itself eliminate Pennsylvania inheritance tax.

A revocable living trust also provides important protections if you become incapacitated. If you are unable to manage your affairs due to illness or injury, your successor trustee can manage the trust assets on your behalf. Additional documents - such as a durable power of attorney and health-care power of attorney - are still necessary for matters outside the trust, and in some circumstances guardianship may still be required.

It is also important to understand what a revocable living trust does not do. Because you retain control over the assets during your lifetime, a revocable living trust does not protect your assets from your creditors or from Medicaid resource rules. These limitations are separate from the probate-avoidance benefits the trust provides, and each requires its own analysis.

Benefits of a revocable living trust include: avoiding probate for trust assets, maintaining privacy, providing a mechanism for incapacity planning, and allowing for structured asset management. Whether a living trust is appropriate depends on your individual circumstances.

While a revocable living trust offers many benefits, it is not the right solution for everyone. Our attorneys will work with you to determine whether a living trust is the best option for your situation and, if so, create a trust that meets your specific needs.

Contact O'BRIEN LEGAL today to schedule your free consultation and learn whether a revocable living trust is right for you.