As you may already be aware, the primary benefit of revocable living trusts is that the assets held within them will avoid probate completely after the death of the grantor, meaning the grantor’s family and loved ones will have access to the assets more quickly and easily than they otherwise would. But, there are several other advantages of living trusts, which are discussed below. For help creating a living trust, feel free to schedule a consultation with one of our Albuquerque estate planning attorneys.
Much like court challenges to wills, court challenges to living trusts are relatively rare. When they do occur, however, it is generally more difficult for the challenger to attack a living trust than it would be to attack a will. This is because when you create a living trust and continuously use it (by, for example, transferring different property into or out of the trust), your conduct will be considered evidence that you indeed intended the trust assets to be distributed the way you specified, and that you were clearly competent to manage your own financial affairs. In the case that someone did want to challenge your living trust, to have any chance at success they’d have to prove either that when you created the trust you were not mentally competent or some third party exerted an undue influence over you, or that the document which created the trust was itself flawed.
You should not be too concerned with the possibility of a legal challenge to your living trust unless you have reason to anticipate that some person in particular, perhaps a relative, will challenge the trust after your death. You may want to be on the lookout for the following, which could indicate that a challenge may be looming on the horizon:
If you do anticipate a legal challenge to your will or a trust created by you, whether for these or other reasons, you should consult with an experienced estate planning attorney to determine what measures you can take to properly protect your assets from such challenges.
If you were to someday become incapacitated, whether due to illness, injury, or old age, a living trust can be of great service in ordering your financial affairs. If you have made a living trust with your spouse as co-trustee, he or she will then be left with full control over the assets held in the trust. Or, if you are the only trustee on your living trust, your successor trustee (who you will likely name at the time you create the trust) will then be in charge of the trust. This means that there will likely be no need for a court to appoint a guardian or conservator for you, who would manage your financial affairs and may end up being a person you would not have chosen for yourself had you been given the opportunity.
This can be of great importance to family members who may be overwhelmed with caring for someone who has become incapacitated. Were it not for the authority granted by the trust document, family members may be forced to petition the court for the legal authority to access the incapacitated individual’s assets to cover the person’s necessary medical care and treatment. This can create added stress and trouble for an already grieving family.