What Revocable Living Trusts Do – And Can Other Tools Do It Too?
A Revocable Living Trust (RLT) offers many benefits, but it’s not the only estate planning tool available. Many people already have beneficiary designations, joint ownership, or powers of attorney in place—and wonder if that’s enough.
Let’s take a closer look at what an RLT can do and compare how other tools measure up.
Benefit #1 - Avoid Probate
What an RLT Does:
Assets titled in the name of the trust avoid probate entirely. This means no court involvement, no delays, and no public process. The successor trustee simply follows the instructions you’ve left behind. However, if you use what’s called a “Pour-over Will”, probate will still be needed.
What Other Tools Can Do – FULL REPLICATION
Other tools can avoid probate for specific assets. A trust avoids probate comprehensively and with fewer coordination issues.
- Beneficiary Designations: Retirement accounts, life insurance, and some bank/investment accounts can pass directly without probate. However, they must be kept up to date and are account-specific.
- Joint Ownership (Joint Tenants with Right of Survivorship): Avoids probate for jointly owned property when one owner dies—but can create complications later (especially if the co-owner dies or becomes incapacitated).
- Transfer-on-Death (TOD) / Payable-on-Death (POD): These tools also avoid probate but work only for the titled asset, not your full estate.
Benefit #2 - Centralize and Coordinate Estate Distribution
What an RLT Does:
An RLT acts as a single hub for managing all your eligible assets—bank accounts, real estate, investments, and more. The trust holds everything and applies one consistent plan for how, when, and to whom assets are distributed.
While this is convenient, it does mean you’ll involve an attorney any time updates are needed and certain assets do not qualify to be titled under the RLT.
What Other Tools Can Do – MOSTLY REPLICATED
Without a trust, your estate may be a patchwork of instructions, increasing the chances of missed assets, unintended distributions, or family conflict.
- Beneficiary Designations: Each institution acts independently based on its form. However, if you work with one institution, the process is relatively simple and quicker to update.
- Titling Tools (Joint Ownership, TOD, POD): These operate independently, which can unintentionally override your will or create unequal distributions.
- Will Only: Requires probate and may not reflect how non-probate assets are distributed.
Benefit #3 - Manage Affairs During Incapacity
What an RLT Does:
Your successor trustee can step in to manage trust assets if you become incapacitated—paying bills, managing property, overseeing investments—without going to court.
However, a trustee only has authority over assets in the trust. Retirement accounts such as Traditional IRA’s or Roth IRA are generally not placed in an RLT so these would be outside their control.
What Other Tools Can Do – FULL REPLICATION OR BETTER
POAs are essential for broad legal powers, but an RLT often works more reliably and efficiently for managing your finances during incapacity.
- Durable Power of Attorney (POA): Allows an agent to act on your behalf for financial or legal matters. Regardless of the presence of an RLT, comprehensive estate plans typically already include the POA. Some banks and institutions sometimes reject POAs or require their own forms, causing delays.
- Joint Ownership: A joint owner can access accounts or property, but this creates risk—creditor exposure, misuse, or conflict of interest.
- Guardianship/Conservatorship: If no trust or POA is in place, your family may have to go to court to get legal authority to act.
Benefit #4 - Control Timing and Conditions of Inheritance
What an RLT Does:
You can delay distributions until a beneficiary reaches a certain age, stagger payments over time, or restrict funds to education, healthcare, or other purposes. This is especially useful for:
- Minor children
- Young adult beneficiaries
- Beneficiaries with special needs or poor spending habits
What Other Tools Can Do – VERY LIMITED
- UTMA/UGMA Accounts: Allow control until the child turns 18 or 21, depending on state law—then the funds are theirs with no restrictions.
Benefit #5 - Protect Privacy
What an RLT Does:
A trust avoids probate, which is a public process. Your assets, debts, and beneficiaries remain private. The trust can also be administered without court filings.
What Other Tools Can Do – FULL REPLICATION
- Beneficiary Designations, TOD, POD, Joint Ownership: Also avoid probate and keep transactions private—but only for that asset.
Benefit #6 - Out of State Property Management
What an RLT Does:
If you own real estate out of your resident state, your estate representative will have to go through each states probate process to settle each piece of property. A revocable living trust owning the property can reduce the number of probates that need to be completed.
What Other Tools Can Do – NOT REPLICATABLE
To my knowledge, this benefit cannot be replicated.