A REVOCABLE LIVING TRUST allows you to retain control over your assets during your lifetime. You can alter, amend, or completely revoke the trust as your situation or desires change. By placing assets into this trust, you avoid probate, the legal process that can be time-consuming and costly. This expedited process ensures that beneficiaries receive assets more quickly after your death.
The trust also provides privacy, as it doesn’t become a public record like a will. Only the trustees and beneficiaries have the right to see the details of the trust, keeping your financial matters confidential.
Furthermore, a revocable living trust can include provisions for managing your assets if you become incapacitated. You can appoint a trusted person as a successor trustee who will manage the trust’s assets according to your instructions if you’re unable to do so.
By providing clear instructions and appointing responsible trustees, you create a smooth transition of asset management during any periods of incapacity and after your death. This clear guidance can minimize family conflicts and misunderstandings.
Lastly, a revocable living trust can offer some protection against legal challenges. While not completely immune to contests, well-drafted trusts often withstand legal scrutiny better than a will.
Key Differences Between a Revocable Living Trust and a Will
Control During Lifetime
- A revocable living trust allows you to maintain control over your assets during your lifetime. You can modify or revoke the trust at any time as long as you are mentally competent.
- A will, on the other hand, only takes effect after your death. It does not provide any mechanism for managing assets during your lifetime.
- Assets held in a revocable living trust bypass the probate process, allowing for a quicker and often less expensive transfer to beneficiaries.
- Assets transferred through a will must go through probate, a public and often time-consuming legal process that validates and administers the will.
- A revocable living trust offers privacy, as it does not become part of the public record. Only those involved with the trust have access to its details.
- A will becomes a public document once it enters probate, allowing anyone to view the contents.
Management During Incapacity
- A revocable living trust can include provisions for managing assets if you become incapacitated, allowing a named successor trustee to take over management according to your instructions.
- A will does not provide for asset management during incapacity, potentially necessitating a separate legal process to appoint a guardian or conservator.
- A revocable living trust holds title to assets and outlines how to distribute them upon death. The trustee carries out these instructions.
- A will directs how to distribute assets that are in your name at death but does not hold title to those assets during your lifetime.
- While not completely immune, a revocable living trust can provide some protection against legal challenges.
- A will may be more susceptible to legal contests.
Complexity and Cost
- Establishing a revocable living trust can be more complex and costly upfront due to the need to retitle assets into the trust’s name.
- Creating a will is often simpler and less expensive initially but may lead to higher costs later during the probate process.
The Benefit of Having a Revocable Living Trust
While both a revocable living trust and a will allow you to specify how to distribute your assets upon death, they differ significantly in terms of control during life, privacy, probate involvement, management during incapacity, and potential costs. Consider all ramifications. Your needs, goals, and circumstances should dictate your choice. Consult a legal professional in estate planning to make the best decision. For help deciding whether a revocable living trust is right for you and your family, contact us today.