It’s generally understood that a will describes where a person’s property is to go when the person dies, but are there better options out there for you? While a will gets the job done - you might even say, where there’s a will there’s a way - you may wish to consider a trust. There are several different types of trusts, but for the purpose of this article the trust that we are discussing is the Revocable Living Trust (RLT) also known as a Living Trust.
A Revocable Living Trust ensures that your assets are transferred as you wish for them to be distributed at the time of your death. In this respect, it accomplishes the same objective as a will, however that is where the similarities end. An RLT is created by an individual or a married couple, often referred to as the settlor(s), during their lifetime. It is called ‘revocable’ because the settlor can revoke or amend the document at any point during their lifetime. For example, it may be amended in the event of a change in one’s family situation or a change in tax laws.
The most recognized benefit of a Living Trust compared to a will is that an attorney need not probate the trust at the time of death. This saves families significantly in legal fees, as many estates require a probate of the will. In fact, attorneys often charge between 3% and 10% of the value of the estate just to do the legal work required for the probate. These fees may seem large, but the tasks that an attorney needs to complete must be to the judge’s satisfaction, and as such, they may be numerous and complex.
With a trust, the probate process is not necessary because during their lifetime the settlor names a successor trustee who takes over management of the trust and fulfills the wishes of the settlor after he or she becomes incapacitated or passes away. In other words, the trustee distributes the assets to the beneficiaries without the need for court supervision.
Another consideration is with regard to incapacity. While a will only speaks after a person’s death, a trust can assist in the management of assets while a person is living, but unable to make their own decisions due to impairment or disability. The successor trustee can manage the assets of the trust when the settlor cannot, whereas a will does not provide any assistance in this situation. Often, a court appointed guardian is required when a person is unable to manage their financial affairs unless a trust is formed. This too requires an attorney, as well as a judge, and court action. A trust can safely eliminate the need for their involvement and reduces the complexity of the matter, saving both time and money.
As the above information demonstrates, a trust is appreciably preferable in comparison to a will in the estate planning process. To learn more, contact an experienced estate planning attorney at Ourednik Law Offices, P.A for additional information and a free consultation.