The Black Hole Revocable Trust

black holeSurprise! Have a Revocable Trust (a/k/a “Living Trust’)? Gotten any statements addressed to it? No? Well, the Trust isn’t going to do what you think it will do.

It’s like buying a car with no gas in the tank. You’re not going anywhere.

And we see this all too often.

(This is no knock on these Trusts; they can be very useful.  But if they’ve got nothing in them but dust, the signed document is next to useless.)

A typical story: a couple fills in a “Trust” form given to them by their banker.  It looks legal and official enough: the print was really small, the right margin was justified, and the signature block looked very important.

They figure the customer service person at the bank must have known what he or she was doing, the bank’s logo was on the top, and sure, this was cheaper than going to a lawyer, so what was the harm?

The bank person assures them that it’s a fine trust; “that’s why the Bank gives these out.”

So they sign, and take a copy home to put with their important papers. Read more