Last Will and Testament vs. Revocable Living Trust
Most people have a bit of a Hollywood image of how assets of a decedent are distributed following their death. Huddled in an office, the potential beneficiaries listen to a Last Will and Testament read by a lawyer and surprises and shocking news ensue. One person is given the entirety of the estate immediately, and the screen fades to black. In truth, the estate planning process can involve several different tools that can enable a person to distribute their assets both following their death and even during their lifetime. Two of the most popular types of documents include a Last Will and Testament (will) and a Revocable Living Trust (trust). Learn the differences between these two to determine which one might be the best option for your unique circumstances.
Last Will and Testaments and Revocable Living Trusts
There are many differences between establishing a will and a trust that will affect your assets and property. Some of the most important differences are listed below.
- In most cases, a will goes through a process known as probate. This legal process is done in a court of law and legally validates a will. The court will determine if any creditors of a decedent need to be paid and then any remaining amount will be distributed to the correct beneficiaries. This process can take months or years and can be quite costly. In contrast, a trust never needs to go through the probate process.
- The probate process is public information. In fact, notices are even sent out in newspapers to ensure that any creditors of a decedent are contacted regarding any debts owed to them from an estate. However, a revocable living trust is always a private matter. Because the trust is private, fewer instances of disputes from family members occur.
- A will only will allow a person to distribute their assets following their death. Conversely, a trust allows a person to distribute their assets both during their lifetime and also after their death.
- If a person becomes incapacitated due to an injury or accident during the course of their life, a will can not provide any protection or assistance. A trust can allow the distribution of estate assets to an incapacitated person during the course of their life.
- Wills may never be altered or changed, they may only be revoked and then a new will may be executed. Trusts are flexible and allow for amendments.
- Trusts have FDIC protection up to $250,000 for every beneficiary with a capped total protection of up to $1,250,000. Wills have no such protection.
Contact an Experienced Estates and Trusts Attorney
Making decisions regarding estate planning can be complicated, but everyone should take the time to visit with an experienced attorney to determine which estate planning tools are right for them. Along with the simple benefits and challenges of each type of estate planning document are other considerations such as tax benefits or ramifications or costs. Contact an estate planning attorney at Giro Law at 201-690-1642 to set up an appointment to help you determine which type of estate planning documents are best for your unique financial situation.