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TRUMP UNIVERSITY WEALTH BUILDING 101

trust and maintains complete control of the trust during his or her lifetime. In
other words, the same person who establishes the trust is also the person who
executes, or carries out, the terms of the trust, and can thus continue to buy,
sell, borrow, or transfer assets at any time. In addition, the Trustor(s) may
change or revoke the disposition of the assets at death, and also change the
persons named as Trustees during their joint lifetimes, as long as they are
considered competent.
For most of us, the biggest benefi t of a Revocable Living Trust is avoid-
ing probate. Without a living trust, your estate (personal assets, business

interests, life insurance death proceeds, and government benefits) will have to
go through probate. What exactly is probate, and why would I want my estate

to avoid it? Probate is the legal process used to finalize an individual’s legal

and financial affairs after their death. Assets and liabilities of the estate are

identified, debts paid, taxes filed, and administrative (i.e., attorney) fees

are paid. Any remaining assets are distributed to the beneficiaries of the

estate, if provided by a will; if there is no will, they are distributed according
to state law.
On the surface, probate sounds like a nice, tidy process, and conceptually
it is. However, once attorneys, accountants, and our court system get involved,
this process can become a nightmare. Probate creates several problems:

• Your estate can be drained by up to 10 percent of its value in adminis-
trative expenses, legal fees, debts, and court costs, leaving your benefi -
ciaries with much less than what you intended them to receive.

• The court—not you—may determine the final distribution of your
estate and the guardianship of any dependents, whether you have a
will or not.
• Your heirs may not receive any assets for months, or even years, and

suffer financial strain if your estate has to be probated.
• Your assets become a matter of public record, which exposes your
assets to heirs’ creditors, friends, neighbors, and even ex-spouses, who
can choose to use the probate process to “contest the will” and demand
your assets.
• If your estate has to be probated, that’s not the end of it. There are still
estate taxes, property taxes, income taxes, accounting fees, and more
legal fees to pay in addition to probate costs that will continue to drain
your estate.

The solution? Don’t choose probate, which is the “default” option that
you’re stuck with if you don’t plan and execute a living trust. Choose a trust.

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