Revocable Living Trusts vs. Lady Bird Deeds:Why Trusts Offer Superior Flexibility and Control
Revocable Living Trusts vs. Lady Bird Deeds:
Why Trusts Offer Superior Flexibility and Control
When planning for the future, many individuals face the question of whether to use a Lady Bird Deed or a Revocable Living Trust to manage their assets. Both options have their benefits, but a revocable living trust often provides more flexibility and control, making it a superior choice in many cases. Here’s why.
Greater Options and Flexibility
A revocable living trust offers significantly more options and flexibility compared to a Lady Bird Deed. With a trust, the grantor can outline detailed instructions for managing and distributing their assets, addressing various scenarios and contingencies that may arise. This flexibility ensures that the grantor’s wishes are carried out precisely, even as circumstances change.
Control Over Property
Both a Lady Bird Deed and a revocable living trust allow the grantor to maintain control over their property during their lifetime. However, a Lady Bird Deed only names the individuals who will inherit the property after the grantor's death, called remaindermen. This can create complications if one of the named remaindermen predeceases the grantor. In such cases, the remainderman's estate might need to go through probate, potentially undermining one of the primary reasons for using a Lady Bird Deed in the first place.
Avoiding Probate
While both instruments aim to avoid probate, a revocable living trust is more effective in this regard. Trusts can be designed to handle multiple contingencies, ensuring a smooth transition of assets without the need for court intervention. Additionally, amending a trust to reflect changes in the grantor’s intentions or the beneficiaries' circumstances is straightforward, ensuring that the estate plan remains up to date and effective.
Privacy Considerations
Another significant advantage of a revocable living trust is the privacy it affords. A trust is a private document, whereas a Lady Bird Deed becomes part of the public record upon the grantor’s death. This means that details about the property and the beneficiaries remain confidential with a trust, providing an extra layer of privacy for the grantor and their heirs.
Multiple Properties
For those contemplating the management and distribution of multiple properties, a revocable living trust is particularly advantageous. It consolidates all properties into a single, manageable entity, simplifying the administration process. In contrast, using Lady Bird Deeds for multiple properties can create a complex and unwieldy estate plan, potentially leading to inconsistencies and complications.
Conclusion
While both Lady Bird Deeds and revocable living trusts serve the purpose of avoiding probate and ensuring the smooth transition of assets, a revocable living trust offers superior flexibility, control, and privacy. It allows for detailed planning, accommodates changes with ease, and effectively handles the complexities of multiple properties. For these reasons, a revocable living trust is often the better choice for comprehensive estate planning.
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This article is provided for informational purposes only and is not intended as legal advice. For further inquiry, please feel free to contact me at the email or telephone listed below.