Revocable Trust

Revocable Living Trust Kits FAQ

Introduction

Estate planning can feel like a dense jungle of jargon and uncertainty. For many, securing their legacy without high legal fees seems like a distant dream. This is where the revocable living trust kit comes in as a strong DIY option. Imagine having the power to decide how your assets are distributed and who will manage your affairs when you can’t. You can also potentially skip the lengthy and public probate process. A revocable living trust kit gives you this control. It allows you to create a personalized plan for your future and your loved ones. But remember, ‘DIY’ doesn’t mean ‘effortless.’ Creating and funding a living trust takes precision and patience, just like baking a perfect sourdough loaf. This guide will give you the knowledge and insights you need. It will give you key questions to guide you on this journey. This way, you can turn complexity into clarity with confidence.

 

Frequently Asked Questions 

FAQ 1: What is a revocable living trust? 

A revocable living trust is a legal document that lets you put your assets into a trust while you are still alive. Then, a trustee manages those assets for your designated beneficiaries. It’s called revocable because you can alter or revoke it at any time when you are mentally competent. This setup can avoid probate. It helps if you become incapacitated and keeps your information private. It’s a private contract on how your assets are to be distributed once you die. 

Scenario: In one case, a family transferred $1.2 million in assets within weeks of a parent’s death. This saved them from a 1.5-year probate that would have cost more than $40,000 in legal fees. 

Takeaway: A revocable living trust provides you with flexibility and control over your assets, both during your lifetime and after your death. 

 

FAQ 2: What is the difference between executing a revocable living trust kit and hiring an attorney? 

A revocable living trust kit provides you with pre-formatted documents and instructions to make your own trust. It is a much cheaper option as a DIY than hiring an attorney. Hiring an attorney offers tailored legal advice. They draft documents for complex situations and ensure all legal information is correct. Revocable living trust kits are cost-effective and easy. But they do not have the legal advice and personalization of an attorney. These are best suited for basic estate plans without any exceptional situations.

Scenario: A revocable living trust kit may cost $50-$200. Whereas an attorney may charge $1,500 to $5,000 or more depending on complexity and location. 

Bottom line: If you seek budget-friendly simplicity, you may choose a kit, but if you have a complex estate or need expert legal guidance, an attorney is the way to go. 

 

FAQ 3: Why should I use a revocable living trust kit? 

A revocable living trust kit lets you avoid probate, maintain privacy, and plan for if you become unable to handle your affairs. Putting assets in the trust lets them go straight to your beneficiaries after you pass away. This happens without needing a court’s help. The trust appoints a successor trustee to manage your affairs in the event you become incapacitated. This means conservatorship is not required. Revocable living trust kits are also usually less expensive than hiring a lawyer.

Scenario: An estate valued at $750,000 was spared probate. This saved the estate approximately $25,000 to $50,000 in court and attorney fees that are typical of probate cases in many states. 

Takeaway: A revocable living trust kit helps save money, gives you more privacy, and makes handing off assets easy.

 

FAQ 4: Are revocable living trust kits for everybody? 

Revocable living trust kits work well for those with simple finances and clear plans for asset distribution. They are suitable for people who have common assets such as a home, bank accounts, and investments and want to avoid probate and plan for incapacity. They are not suitable for complex estates. This includes special needs beneficiaries, blended families with tough relationships, business succession plans, and complex tax planning needs. If you have a complicated situation, speak to an attorney.

Scenario: A person with a home and a few investment accounts used a kit and saved a ton of money in legal fees. A business owner with properties in several states found the revocable living trust kit to be lacking. 

Takeaway: Assess the complexity of your estate. Kits are suitable for simple cases, not for complicated financial or family structures. 

 

FAQ 5: What are the legal considerations when using a DIY kit? 

When using a DIY kit, take note of state-specific regulations on setting up a trust, signing documents, and changing asset titles. The rules on witnesses, notarization, and real estate deeds differ from state to state. The documents won’t be legally binding for those assets if the rules aren’t followed or if the trust isn’t fully funded. You are essentially being your own attorney, so accuracy and completeness are important. 

Scenario: One client did not properly notarize a deed in his kit. This means his home had to go through probate even though he had a living trust document.

Takeaway: Read your state’s legal rules and sign all documents appropriately to ensure your trust is valid.