By: Kyle C. McInnis
Cook, Yancey, King and Galloway, APLC

In the past several years, much has been written by groups such as the AARP about the advantages of using a revocable trust or "living trust" as an alternative to a last will and testament. A revocable trust, it is often claimed, is a more effective tool for the efficient administration of you assets upon your death. This claim usually rests on two main points: 1) a promised avoidance of probate and 2) reduced legal and administrative costs associated with transferring your assets to the intended beneficiaries of your estate. As explained below, these purported advantages typically are not as great as advertised when compared with a properly drafted last will and testament.

I have found that probate is a commonly misunderstood judicial process, especially among seniors. Common probate proceedings are usually straightforward affairs. The decedent's family and the probate attorney present a will to the proper court, if a will was signed. Then, the decedent's assets and debts are inventoried and valued. Lastly, the court orders that the assets pass in accordance with the will or, if no will was prepared, in accordance with Louisiana law. The process usually takes a few months and results in a court judgment that transfers assets to the intended beneficiaries of the decedent's estate. In my experience, the greatest costs in probate proceedings is locating and valuing a decedent's assets. If the decedent maintained good records regarding the extent and value of their assets, probate costs are minimized.

Probate has gained a bad national reputation because some states, especially California, have enormously expensive fees for probate proceedings and administration. Louisiana, however, does not impose large court fees and costs for the typical probate proceedings are reasonable. This is especially true if the executor of the estate is an "independent executor" under Louisiana law. If an independent executor is appointed under your will, there are very few things that a court would need to supervise during the administration of the estate, such as sales of estate assets.

Given the ability to greatly minimize the costs and fees associated with probate by appointing an independent executor and providing good records of your assets, it is often less expensive to execute a will, when compared with a revocable trust. If you choose a living trust, your assets would need to be transferred into the trust before your death and then transferred again to the trust's beneficiaries after your death. Each transfer costs money. A probate proceeding, however, requires only one transfer of assets which is accomplished by the probate proceeding. Further, attorney fees for drafting a simple will and seeing it through probate are often less than or equal to the expense of drafting a revocable trust.

If all of your assets are not transferred to the living trust during your lifetime, it is possible that the assets left outside of the trust would have to pass through a probate proceedings anyway. This, of course, will partially defeat the purpose of the living trust.

There are at least two legitimate advantages to revocable trusts. They do provide for the confidential transfer of assets at death. Probate proceedings are recorded in the local courthouse. Also, living trusts can be useful tools for people who need a trustee to completely manage their assets. Such cases are usually rare and less expensive means can be employed to accomplish effective management of a person's assets.

While living trusts are extensively marketed to seniors, they may not be as advantageous in Louisiana as other states. A well-drafted will and a probate procedure is typically just as cost effective as a living trust. Whether a will or a revocable trust is right for you is a decision you should make with the advice of competent advisor after weighing the respective advantages and disadvantages of each option.