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VOL. 127 | NO. 248 | Thursday, December 20, 2012

Dana and Ray Brandon

Consider a Revocable Living Trust

By Ray and Dana Brandon

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Ray’s Take The main advantage touted for having a Revocable Living Trust (RLT) is to avoid probate, but its strengths go far beyond that.

An RLT is a legal document created by an individual to hold all or part of his or her assets. Typically the owner of these assets is also the Trustee, retaining complete control over how these assets are handled and along with the having ability to make changes to the Trust as needed. Trust directives can even extend beyond the grave.

RLTs don’t have to go through probate, which not only eliminates any of the delays or costs associated with this process but also preserves privacy; assets transferred through the trust remain confidential.

Another advantage of RLTs is that these trusts cover three phases of the donors existence: alive and well, alive but unwilling or unable to serve, and after death. By identifying a successor Trustee to takeover management of the Trust’s assets when the original Trustee is unable to do so, a lot of uncertainty is avoided.

Additional advantages include the ability to segregate assets into community property and individual property gained before a couple marries, to control the spending of any guardians of minor children, and there are even some tax minimization applications.

RLTs aren’t just for the very rich. They can also be extremely beneficial for a family where real estate is owned in another state, avoiding multiple probates.

However, it is crucial to obtain the services of an estate-planning attorney to form an RLT. Plus, there is significant record keeping involved, property must be retitled and there are related expenses. Your financial adviser can tell you if an RLT would benefit you and suggest the next steps you take. It’s certainly worth looking into.

One last thing: Probate is not necessarily a bad thing – some sort of evil to always be avoided. It’s just a method of being sure what you say in your will actually gets done. An RLT is just another option.

Dana’s Take Ray and I flew to California for our anniversary a few years ago. Little did we know that, on the way, the pilot’s windshield cracked mid-flight. As we watched the fire trucks circling below our plane, all we could think about was our children at home in Memphis. Lucky for them, we had already met with an attorney and planned for their security. Lucky for us, the emergency landing went well.

Lawyers get a bad rap, but a good estate-planning attorney can provide immeasurable peace of mind for you and your family. Ask your financial adviser to recommend an experienced estate-planning attorney and make an appointment – even if you are young and healthy and feel great.

Your spouse, children and grandchildren will love you even more for having contingency plans in place before something unexpected happens.

Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at raybrandon@brandonplanning.com.

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