Many people believe the estate planning process simply involves having an attorney draft a last will and testament. The reality is estate planning can consist of a host of financial options that your estate planning attorney will review with you.
One popular option is a revocable living trust. There are differences between a revocable living trust (“trust”) and a last will and testament (“will”). The basic differences between them are outlined below.
Last Will and Testament Versus a Revocable Living Trust
Many of us understand that a will provides a way to distribute assets to designated beneficiaries upon a death of a loved one. Wills are oftentimes the best choice, but a revocable living trust can provide additional benefits that are not available within a will.
Some differences between a will and a trust include the following:
- A trust can be used to effectively leave assets to a minor or other person unable to make appropriate decisions regarding investments, disbursements, and expenditures.
- Wills often go through the probate process which is to validate your will, ensure your creditors are paid, and then distributes the remaining assets to your beneficiaries. Probate occurs in a court of law. Probate can be somewhat costly and time-consuming; in many instances probate leaves little funds behind for your beneficiaries. On the contrary, a trust typically does not go through probate process.
- Due to probate process, wills are public information. In fact, notices can be placed in newspapers or other public sources to provide creditors an opportunity to obtain the assets they are owed from an estate. A trust, however, remains private. Additionally, because of the private nature of a trust, disputes or contested matters from disgruntled family members occur less frequently.
- A will distributes assets from your estate after your death. A trust, on the other hand, enables you to distribute assets throughout your lifetime, and also upon your death.
- Unlike a will, a trust allows your designated trustee to make financial decisions on your behalf. This is especially important in the unfortunate situation you become incapacitated and are unable to do so.
Contact an Experienced Estates and Trusts Attorney
Wills and trusts are both powerful tools in the estate planning process. There are many tax ramifications, costs, and other important factors that go into crafting a perfect estate plan.
Consulting with an experienced estate attorney can help ensure your hard earned savings are maximized and protected. Contact the attorneys at Dworken & Bernstein at 440.946.7656, 216.861.4211 or online today for your free consultation.