The choice between a Will and a Revocable Trust depends on your specific circumstances, goals, and preferences. Consulting with an estate planning attorney can help you determine the best approach for your needs.
A will and a revocable trust are both estate planning tools, but they have distinct differences
What Is A Will? A will is a legal document that specifies asset distribution after death. For instance, an elderly person may assign her home to her daughter and divide her investments among her grandchildren. Wills undergo probate, a potentially lengthy and costly public process where a court validates the will and ensures all debts and taxes are paid.
What is a Revocable trust? Revocable trusts, or living trusts, provide flexibility, allowing control over assets during one's lifetime with the ability to alter or dissolve the trust before death. For example, a retired couple might manage their assets—like their home and savings—through a revocable trust, ensuring these bypass probate and quickly reach beneficiaries after their death. This setup offers significant tax advantages, including estate tax minimization.
What Are The Differences:
1.Control during lifetime: With a will, you retain full control over your assets during your lifetime. In contrast, a revocable trust allows you to transfer assets into the trust during your lifetime and manage them as the trustee, maintaining control until you pass away or become incapacitated.
2. Probate: A will must go through the probate process, which can be time-consuming and expensive. Assets held in a revocable trust generally avoid probate, providing a faster and more private transfer of assets to beneficiaries.
3. Privacy: Wills are public documents once they go through probate, whereas revocable trusts typically remain private, as they don't go through probate.
4. Flexibility: Wills are flexible and can be easily updated by creating a new will or adding a codicil. Revocable trusts also offer flexibility but may require more formal steps to amend or revoke.
5. Asset protection: Revocable trusts do not provide asset protection during your lifetime because you maintain control and ownership of the assets. However, they can offer protection after your passing, especially if structured to create continuing trusts for beneficiaries.
6. Management during incapacity: Both documents can include provisions for incapacity planning, but a revocable trust can provide more seamless management of assets since the successor trustee can step in immediately upon your incapacity without court involvement.
Disclaimer:Â The author of the above blog post is not an attorney or tax professional. For obtaining guidance in these subject matters please consult with a professional in these areas.
The author SEESAN is a Certified Notary Trust Delivery Agent located in the state of Delaware. For your Trust and Will delivery and notarization please contact hom via:
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