Does a revocable living trust (RLT) help mitigate inheritance tax? No. Does an RLT offer tax advantages during life? No. So why consider making a revocable trust part of your estate plan? While there are limits to what a revocable living trust can do, there are some compelling reasons to consider making one part of your estate plan.
First, assets titled in the name of a revocable living trust pass outside the probate process following the death of the trusts creator, aka grantor or trustor. The probate process involves reporting to and supervision by the probate court in the county of last residence of the grantor. It also typically involves fees, which vary state to state, levied by the court. Due to the reporting requirements and the need to court sign-off, settling a probate estate tends to be cumbersome. While the settlement process through a revocable living trust must still follow state mandated rules, such as filing a notice to creditors and waiting the mandated period for potential claims to be filed, the lack of court supervision, reporting and fees make settlement through a trust less burdensome and more cost efficient.
