More and more LGBT couples, even those in a Civil Union, are using revocable living trusts as a way to efficiently pass on their assets to their partners and to insure that their partners will handle their personal affairs if they ever become incapacitated.
A revocable living trust is a legal arrangement where a person executes a written trust document naming themselves as the trustee of their own trust and while alive they transfer their property to their trust so that the trust holds legal title to all their assets.
The document creating the trust allows the person making the trust (maker) to at any time dissolve the trust, change the trust or take assets from the trust; always retaining complete control of their property. The trust document can provide for the appointment of a successor trustee (surviving LGBT lover/spouse) who would only act upon the death or disability of the maker of the trust.
A living trust offers the following advantages:
- Keeping control. While the maker is alive he or she has the right to the income generated by the trust and sole use of the trust property, such as the house and bank accounts. Upon his or her death the assets of the trust could then be distributed.
- Providing for Disability. Should the maker of the trust become physically or mentally incompetent the living trust can serve as the framework for the management of the maker's assets and property.
- Reducing delay and cost. The living trust can act like a will and dispose of the maker's property upon death. The property of the trust is not subject to probate proceedings, thus avoiding court supervision.
- Preserving Privacy. Trusts can also serve individuals who don't want an inheritance to be made public. It avoids problems of friends and family from going into the Probate Clerk's office to look at the file on their estate and see who got what.
- Avoiding ancillary probate. Someone who owned a vacation house in Lakeside, Michigan and a condominium in Chicago could have probate in both those states unless they used a living trust.
When a living trust is combined with a durable power of attorney, a non-disabled LGBT partner can transfer all of the disabled person's property to that person's living trust to avoid probate at death.
