Today's take-home lesson: In Connecticut, the only genuine benefit of a revocable living trust is probate avoidance.
To be fair, I will also mention that there is a privacy benefit as well; living trusts generally do not become public record, in contrast to wills. However, in my own 16+ years of law practice there have been very few clients who have cared deeply about about the privacy issue.
In any case, it's important to keep in mind that nearly all of the living trust benefits your neighbor has told you about is not true. More specifically, they do not lower your probate court fees, and any estate tax liabilty you have can be addressed just as easily in wills or by other means.
That's correct. The probate court fee assessed on your estate is based on the size of your estate, which includes probate AND non-probate assets. Contrary to common sense, it is not based on how many of your assets go through the probate process.
Additionally, wonderful things like credit shelter trusts, general support trusts for young or problematic beneficiaries (or young AND problematic beneficiaries!), special needs trusts, spendthrift trusts, etc. can all be incorporated into your wills; you don't necessarily need revocable living trusts to include these in your overall estate plan.
Please note that the concept of avoiding probate is nothing to scoff at! The probate process can be (but isn't always) a lengthy process and an administrative headache. Particularly if you have real estate located somewhere outside of Connecticut.
However, you should keep in mind that you probably have some assets that are already designed to avoid probate upon your death, regardless of whether you have a living trust or not, such as beneficiary-driven assets (e.g. life insurance, annuities and qualified retirement accounts) and joint assets.
So...before you sign up for a revocable living trust, which is typically double the cost of a simple will package, make sure your attorney walks you through your "probate exposure".
The all-important disclaimer: This blog does not offer legal advice, nor does it create an attorney-client relationship. If you need legal advice, consult with a lawyer instead of a blog.