Trusts vs. Wills
Trust vs. Will: Why a Revocable Living Trust Might Be the Right Choice for You
You have worked hard over the years to save for retirement, save for your family, and save for their future. It is well worth your while to spend a little time to plan ahead so that those assets are distributed in accordance with your wishes when you pass away. A last will and testament, however, is not the only way to have your wishes carried out.
There is another vehicle that gets you to the same place – a revocable living trust. Having the same purpose as a will, a revocable living trust is a legal instrument that provides lifetime and after-death property management. You may designate yourself as trustee, and then in the trust document provide for a successor to manage your property upon your incapacity or death.
In fact, a revocable living trust, if properly written and funded, allows you to:
- Avoid probate
- Plan for how property is managed if you are incapacitated
- Control the distribution of your property after you die
- Maintain your privacy
Let’s take a look at each of these in a little more detail:
To Probate or Not To Probate, That Is The Question
One of the most attractive features of a living trust over a regular will is avoiding probate. As you may know, probate is a court proceeding whereby a judge oversees the distribution of someone’s assets as outlined in a will. Probate takes a long time, can be costly, and for most estates is entirely unnecessary.
A living trust is not subject to the probate process. Accordingly, a trust avoids all of the costs associated with probate. Upon your death, a trustee (whom you have designated) can manage the assets or funds in the trust, and distribute them to beneficiaries immediately. The only time probate may come into play with a living trust is if the trustee needs to limit creditors’ claims.
Planning for Incapacity
With a will, you cannot name your spouse, partner, child, or other trusted friend to have authority over your assets in the event you become mentally incapacitated. You would need a separate power of attorney for such a circumstance.
A living trust, however, allows you to plan for incapacity as well as death. Your successor trustee, who will step in when you pass away, may also step in to manage your affairs during the time of your incapacity. The trust instrument also allows you to specify how mental incapacity should be determined, such as by certification of a physician or team of physicians. Accordingly, the possibility of a court-administered conservatorship is eliminated with a living trust.
Control the Distribution of Assets
A living trust satisfies the same basic purpose as a will, which is the distribution of assets. In the trust instrument, you can designate beneficiaries for your property. A key difference from a will, however, is that once a trust is created it is empty until property is transferred into it. So, unlike a will, you would need to take an extra step of transferring property into the trust.
Two things you cannot do with a trust but can do with a will, however, are (i) name an executor and (ii) name guardians for your children. If you leave property to a minor using a living trust, the trustee manages the property until the child reaches an age determined by you.
The Benefit of Privacy
In addition to avoiding probate, the other attractive feature of a trust is privacy. After your death, a will becomes a public document. Once public, people will be able to find out how many assets you had, and the manner in which they were distributed. A living trust, by contrast, does not become a public document. If you want to keep your affairs away from prying eyes, a living trust is the way to go.
The Benefit of Going With Phil Bryce To Set Up Your Revocable Trust
So, which is the right asset distribution vehicle for your situation? Of course, the only way to get the optimal answer to that question is to consult with a qualified, experienced estate planning attorney. Consider Phil Bryce to handle your estate planning needs.
With 30 years of experience practicing estate planning law, and a passion for helping each and every client make sensitive and important choices as part of end-of-life planning, Phil Bryce can help you navigate the pros and cons of whether to use a will or living trust. Call today at (865) 690-5566 for a free estate planning review. You and your loved ones will be happy you consulted with Phil.