Yes!  Whether the RLT owns the asset or the RLT is the POD Beneficiary, the asset avoids passing through probate at death.  However, an RLT-based plan often includes planning goals beyond just probate avoidance.   Of course it should be noted that funding recommendations are specific to the client, the client’s goals, and her specific estate plan.  In general, however, for certain accounts (e.g. brokerage accounts, investment accounts, savings accounts) there are further benefits beyond probate avoidance that are triggered when such account is owned by your RLT.  A properly drafted RLT has benefits above a power of attorney, in that it gives specific guidance to the Trustee on how to use assets during periods of incapacity (versus a fiduciary/best interest standard applied to the Power of Attorney).  In addition, in our experience, we have found that the transition of the account to a disability Trustee is usually smoother than the use of a power of attorney.

In addition to the disability benefit, for married clients with estate tax planning incorporated into their joint plan, the joint RLT as owner versus a POD beneficiary is crucial.  For example, if the investment account remains a jointly owned account by the spouses with their RLT as POD Beneficiary (for after they are both deceased), then the account will simply pass automatically to the surviving spouse, outright, at the first spouse’s death (regardless of what the RLT says).  The asset then becomes part of the survivor’s estate and taxable at the survivor’s death. If the couple has incorporated estate tax planning under their joint RLT (to capture the $1m Massachusetts estate tax exemption amount for example), then the joint RLT is effectively pointless for this purpose in that scenario because there is no way to capture the $1m at the first spouse’s death if the assets go directly to the surviving spouse as joint owner.  The only way to effectively capture the $1m at the first spouse’s death is if the asset is already owned by the trust during both parties’ lives.  Even if this scenario does not apply to your specific plan, the disability benefits should not be discounted.