Do I Need a Revocable Living Trust?

September 1, 2025 | Author: Deppe Fredbeck & Yount LLP

When thinking about estate planning, many people start out convinced that they only want a “simple” Will. We also frequently get asked whether a person needs a trust. While there are many different types of trusts available, one of the most common types is the revocable living trust (RLT).

A revocable living trust is a legal arrangement you create during your lifetime to hold and manage your assets. You typically act as both the settlor (the person who creates the trust) and the trustee (the person who manages the trust), which means you maintain full control over everything in the trust during your life. So long as you have the required mental capacity, you can make changes, add or remove property, and even revoke the trust entirely. Upon your death or if you become incapacitated, a person you’ve named as a successor trustee (a/k/a an alternate) steps in to manage or distribute your assets according to your instructions. Except in rare situations, this can all be done without court approval.

There’s a misconception that only people with large estates need a trust. While high-net-worth individuals often use trusts as part of their estate planning, people with more modest estates can benefit as well. If you own real estate, have a blended family, or simply want to avoid probate and allow for a smooth transition for your loved ones, a RLT may be a smart choice regardless of the total value of your estate.

A common reason why people choose a RLT is to avoid probate. Probate is a colloquialism for formal estate administration. What this means is the court-supervised process of validating a will and overseeing payment of bills and distribution of assets to the beneficiaries. It is a public process and can be time-consuming and expensive (although the total time and cost can vary greatly depending on each situation). This process can take anywhere from several months to over a year to complete and involves court costs and attorneys’ fees. Additionally, Wills become part of the public record during estate administration. A RLT allows your successor trustee to manage and distribute your assets privately, without involving the court (unless someone files to challenge the trust).

A RLT also offers flexibility in administration. For example, you can name a child, sibling, or other trusted individual to serve as co-trustee with you even during your lifetime. This arrangement allows that person to assist with financial management as needed and to familiarize themself with your wishes and assets. It can be especially helpful if you begin to need support in managing day-to-day finances, or if you want to gradually transition administrative duties to someone else.

RLTs are especially helpful when you own real estate in more than one state. Without a trust, your estate could be required to go through probate in each state where you own property. That means it will be necessary to hire an attorney in each of those states to go through the estate administration process there. With a RLT, those properties can be administered in one streamlined process without multiple court proceedings.

It’s important to note that a RLT isn’t a “set it and forget it” document. Creating the trust is just the first step. To make it effective, you must also fund it by retitling assets in the name of the trust. This includes transferring real estate (which your attorney should take care of for you), updating bank account ownership, and adjusting ownership or beneficiaries of investment accounts. Any assets that remain outside of the RLT may still be subject to probate, so it’s important to work with your attorney to ensure everything is properly transferred.

Is a Revocable Living Trust Right for Me?

In summary, a revocable living trust might be a worthwhile part of your estate plan if you:

  • Value privacy and would rather not have your estate go through public court proceedings;
  • Are comfortable with your trustee not being subject to oversight by a judge;
  • Prefer a faster and more flexible way for your trustee to handle your estate;
  • Want to avoid probate in multiple states due to owning real estate in other states;
  • Would like the option to name a co-trustee who can help manage your assets now or in the future; or
  • Are looking for potential cost savings and ease of administration after your passing.
Getting Started

If you're considering a revocable living trust, the first step is to consult with an experienced estate planning attorney. Trusts are a sophisticated planning option and should not be created without the help of an attorney. At Deppe Fredbeck & Yount, our attorneys will help you review your assets, clarify your goals, and determine whether a trust makes sense for your specific situation. Once the trust is drafted and signed, your attorney will give you instructions for funding it.

One key limitation is that a RLT does not protect your assets from the cost of long-term care, such as nursing home expenses. If you are concerned about Medicaid eligibility or shielding assets so that they can pass to your children instead of being used to pay for care, make sure to talk to your attorney about other ways to prepare. No matter your type of plan, it is important to review your estate plan regularly, especially after you or others involved go through major life changes.

Sources:

https://www.investopedia.com/terms/r/revocabletrust.asp