Revocable Living Trusts: The Best Way to Avoid Probate?

When planning your estate, avoiding probate—the court-supervised process of distributing assets after death—is a top priority for many. Probate can be time-consuming, costly, and public. One popular solution is the revocable living trust (RLT). But is it truly the best way to bypass probate? Let’s dive into the details.


What Is a Revocable Living Trust?

A revocable living trust is a legal entity you create to hold ownership of your assets during your lifetime. You (the grantor) act as the trustee, managing the assets, and name a successor trustee to take over after your death or incapacity. The trust is “revocable,” meaning you can modify or dissolve it anytime while you’re alive.

Unlike a will, which only takes effect after death, a living trust operates immediately. Upon your passing, the successor trustee distributes assets to your beneficiaries without court involvement, bypassing probate entirely.


Why Avoid Probate?

Probate has several drawbacks:

  1. Time: It can take 6–24 months, delaying inheritance.
  2. Cost: Court fees, attorney costs, and executor commissions can consume 3–7% of the estate’s value.
  3. Privacy: Probate records are public, exposing your assets and heirs.
  4. Complexity: Multi-state properties may require separate probate proceedings.

How a Revocable Living Trust Bypasses Probate

  1. Funding the Trust: Transfer ownership of assets (homes, bank accounts, investments) into the trust.
  2. Management During Life: You retain full control as trustee.
  3. After Death: The successor trustee follows your instructions to distribute assets directly to beneficiaries.

Example: If your home is owned by the trust, your successor trustee can transfer it to your heir without court approval.


Benefits of a Revocable Living Trust

  1. Avoid Probate: The primary advantage—fast, private, and cost-effective transfers.
  2. Privacy: Trusts are not public record, unlike wills.
  3. Flexibility: Change or revoke the trust anytime.
  4. Incapacity Planning: A successor trustee manages assets if you’re unable to.
  5. Multi-State Properties: Avoid ancillary probate for out-of-state assets.

Drawbacks of Revocable Living Trusts

  1. Upfront Costs: Drafting a trust is more expensive than a simple will (typically 1,500–1,500–3,000 vs. 300–300–1,000).
  2. Ongoing Maintenance: Must re-title new assets to the trust.
  3. No Tax Advantages: RLTs don’t reduce estate taxes (unlike irrevocable trusts).
  4. Doesn’t Replace a Will: A “pour-over will” is still needed for assets accidentally left outside the trust.

When Is a Revocable Living Trust Most Useful?

  • You own property in multiple states.
  • You have significant assets (e.g., real estate, investments).
  • Privacy is a priority.
  • You want to plan for potential incapacity.

Not Ideal For: Small estates with minimal assets or no real property.


Alternatives to Avoid Probate

  1. Joint Ownership: Assets with rights of survivorship (e.g., joint tenancy) transfer automatically.
  2. Beneficiary Designations: Use TOD (transfer-on-death) or POD (payable-on-death) accounts.
  3. Simplified Probate: Some states allow expedited probate for small estates.

However, these methods lack the comprehensive control and incapacity planning of an RLT.


Steps to Set Up a Revocable Living Trust

  1. Draft the Trust Document: Work with an estate attorney to outline terms, trustees, and beneficiaries.
  2. Fund the Trust: Transfer deeds, titles, and accounts into the trust’s name.
  3. Update Periodically: Revise after major life events (marriage, divorce, new assets).

Is a Revocable Living Trust the Best Option?

For many, yes—especially those with complex estates or privacy concerns. However, it’s not a one-size-fits-all solution. Pair it with a will, advance healthcare directive, and power of attorney for full protection.

Consult an estate planning attorney to tailor a strategy to your needs.

Scroll to Top