Should a High Net Worth Estate Plan Use a Revocable Living Trust?

Estate planning is an essential process that allows people and families to protect and distribute their assets according to their wishes. For high net worth families, the complexity of their financial situation often requires more advanced estate planning strategies. Revocable living trusts can play a key role in these strategies. An experienced estate planning attorney can provide guidance on the best ways to use revocable living trusts and other types of trusts to achieve a family’s goals.

What Is a Revocable Living Trust?

A revocable living trust, also known as an inter vivos trust, is a legal document that holds ownership of a person’s assets during their lifetime and provides instructions for the distribution of those assets both before and after their death. Unlike other types of trusts, such as irrevocable trusts, a revocable living trust can be changed or revoked by the grantor at any time.

The primary purpose of creating a revocable living trust is to avoid probate, which is the court-supervised process of distributing a person’s assets after death. Probate can be time-consuming and expensive, especially for high net worth estates with complex asset structures. By placing assets in a revocable living trust, they will not be subject to probate proceedings.

Benefits for High Net Worth Families

Families with a high net worth may have significant wealth tied up in various types of assets, such as real estate properties, investment portfolios, business interests, and valuable personal belongings. Here are some reasons why using a revocable living trust may be beneficial when managing these assets and distributing them to different beneficiaries:

• Privacy: Unlike wills, which become public record when they are filed in probate court, trusts provide privacy. They allow a family’s financial affairs to remain confidential.
• Avoidance of probate costs: Probating an estate can involve substantial costs, including court fees and attorney fees. By utilizing a revocable living trust, some of these expenses can be minimized or even eliminated.
• Asset protection: A revocable living trust may include some provisions that can ensure that assets will be protected from misuse and managed and distributed correctly. However, other types of trusts, including irrevocable trusts, may be a better option to ensure that assets are protected from creditors or lawsuits.
• Continuity of management: In the event of incapacity or disability, a successor trustee named in the trust document can seamlessly take over management of the assets without the need for court intervention.
• Tax planning opportunities: Living trusts may play a role in tax planning strategies, ensuring that wealth can be transferred to future generations correctly. However, other types of trusts may provide better tax benefits by reducing the value of a person’s taxable estate and minimizing the estate taxes that will apply following a person’s death.

The Role of Professional Guidance

Estate planning is a complex area of law that requires careful consideration and knowledge of the ideal strategies for asset distribution and wealth preservation. High net worth families can seek professional guidance from an estate planning attorney who has experience working with clients who own substantial assets. At the Gierach Law Firm, our attorney has an in-depth understanding of the laws and regulations that affect trusts and estates and the tax issues that are specific to families with significant assets.

Contact Our DuPage County Revocable Living Trust Attorney

If your family has a high net worth, the Gierach Law Firm can provide you with comprehensive estate planning services. Our experienced Naperville living trusts lawyer will work closely with you to assess your unique financial situation and goals and advise you on whether a revocable living trust is appropriate for your estate plan. When establishing trusts and addressing other related concerns, we will draft the necessary legal documents and ensure that all formalities are followed according to the applicable laws. Contact us today at 630-228-9413 to arrange a consultation.