The upfront costs of creating a Revocable Living Trust is almost certain to be higher than creating a Will, but a Revocable Living Trust may be cheaper in the end. Why? The Revocable Living Trust typically avoids the time and expense of probate.
The caution behind that last statement is that avoidance of probate is only achieved if the deceased correctly transferred sufficient assets into his or her Revocable Living Trust during his or her lifetime. If not, both a probate and trust administration may be required, and a need for two processes won’t save money!
Probate is required in Minnesota if the deceased owned Minnesota real estate in his or her name alone or if the deceased owned $75,000 or more in probate assets in his or her name alone. Assets held in a Revocable Living Trust, and a few other categories of assets, are not probate assets and don’t count towards the $75,000 trigger.
If your children are adults, but still relatively young, a Trust provides the opportunity to distribute your assets to your children over time so as to give them the chance to first gain some financial maturity. With a Will, your adult children will inherit your assets as a lump sum.
A Revocable Living Trust may also lead to faster disposition of your affairs and assets after your death.
Many of the duties of a Personal Representative under a Minnesota Will-based estate plan and a Trustee under a Trust-based estate plan are the same or similar. However, a key difference is that the Trustee that you’ve named in your Trust doesn’t need Court approval to act whereas the Personal Representative that you’ve named in your Will must be officially accepted by the Probate Court before he or she can act.
It takes time to submit all of the information and documents that the Probate Court requires before the Court will officially grant someone the power to act as the Personal Representative of your estate. Court filing fees, legal publication fees and attorney fees are incurred.
Note, however, that even a trust administration could end up in Court if beneficiaries or creditors complain about the Trustee’s administration of the Trust, but such complaints are the exception.
A lawyer whose primary focus is on estate planning, probate and trust administration can help you decide whether a Will-based or Trust-based plan is your preferred choice.
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