A revocable living trust is not primarily for the benefit of the trust creators (“settlors”), and instead are for the benefit of the beneficiaries of the settlors. This is because the property in the trust is still the property of the settlors and creating and funding a trust does nothing to fundamentally change that. The settlors are still the owners and primary beneficiaries of all trust assets while they are alive. The settlors can still sell or encumber the real property in the trust and sell, exchange, or redeem securities in the trust.
Typically, once all settlors are deceased, the property in the trust can be transferred to the beneficiaries of the trust relatively easily. All the transfers from the trust can take place in as little as a month and a half instead of having to wait a minimum of 7 to 8 months, and likely over a year, to transfer bank accounts, securities, and real property to beneficiaries via a probate court proceeding.
However, if the beneficiaries are minors or have special needs the trust can do more than efficiently transfer property to them. The trust can actually protect them.
In the case of minors, property that is left to minors outside of a trust is placed in control of a guardian, who is appointed by the Court. Once the minor turns 18, all of that property comes full under control of the recently turned 18-year-old. The guardianship is an extremely expensive process which is paid for out of the funds left for the minor. Handing over assets to an 18-year-old is not generally a good plan. A trust can delay distribution until a later age, normally 25 or 30 years old, which is chosen by the settlors. The trustee the settlors choose is between the assets of the trust and the young beneficiary. The assets in the trust can still be used to support the beneficiary, such as paying tuition. The beneficiaries just don’t gain fill control until an age determined by the settlors.
Another way that trusts can protect a beneficiary is in the case of an individual with special needs who receives public benefits. A properly drawn trust is able to protect a such beneficiary from losing needed public benefits by placing a trustee in between the property and the beneficiary. This allows the beneficiary to continue receiving their public benefits, while also having the trust assets to fill in any gaps left by the public benefits with trust assets.