Revocable Trusts

Many SC residents use Revocable Living Trusts (RLT) as estate planning tools. And as I have written before, and was reminded again after meeting with gravely disappointed clients recently, the main purpose of a RLT is avoidance of probate. A RLT does NOTHING to PROTECT ASSETS in the event of nursing home placement, regardless how trusts are often advertised as ASSET PROTECTION TRUSTS!

There are 2 steps in having a RLT. The first is creating the RLT and this is typically the attorney's job. The second is "funding" the trust, i.e. transferring assets into the trust. Except for the attorney creating deeds for the transfer of real estate, the client, as Trustee, typically transfers all bank accounts, stocks, cars, etc. into the RLT. Transferring assets into the RLT is called "Funding" . For a RLT to have any value for your heirs, it should be funded with all of your assets(with some exceptions, IRA's for example).

One common problem is how clients presume that once their RLT is initially funded, there is not much else to do. A good Trustee monitors his trust during its entire existence. To have value as a probate avoidance tool, not only must assets