Richard Morgan, Morgan and Disalvo.

Another in our series of Back to the Basics Videos Newsletter Series. We’re now talking about revocable living trusts, and I want to go over a few odds and ends about revocable trusts. Number one, if you have a revocable living trust as your main estate planning document, do you still need a will? And the answer is yes. You need what’s called a pour-over will. That’s just an informal name. It’s a relatively short will. And it says, take all the assets that go through my probate estate when I die, and pay my creditors, and then distribute those assets from the probate estate over to your revocable living trust. Because that’s where your main plan is located.

The other questions are, number one, why would you choose a revocable living trust over a will as your main document? And the analysis is revocable living trust costs a little bit more money, because they’re more complicated to draft and they’re a little bit more hassle to utilize. So why would you want to spend more money and have a little bit more hassle when you can have a will? Especially in Georgia, where the probate process in Georgia is not a big deal. And the reason is, if the benefits of your revocable living trust, in your particular case, outweigh the costs and hassles, you go the revocable living trust-based route. If they don’t, you stay with the will. Simpler, a little bit less money.

In our particular practice, our clients are about 50% will go with the will-based plan, about 50% will go with revocable living trust-based plan. It’s all based on particular facts and circumstances in that particular client’s situation. A couple of other things I want to get out of the way, and that is some people say, if you read on the internet, you would think that revoke living trust are needed because the situation is more complicated from a tax perspective. So you get tax benefits, and you might get some asset protection benefits that you couldn’t get through a will.

That’s just simply wrong. You can get exactly the same tax benefits with a will as a revocable living trust. You get exactly the same asset protection benefits you get with the will as you get with a revocable living trust. So those are not reasons to choose revocable living trust.

Richard Morgan, Morgan and Disalvo.

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