A revocable living trust is an option to consider when doing estate planning. Creating such a trust can get your assets to beneficiaries much quicker than with a will, which has to go through probate court.
While some assets, including 401(k) accounts, can be transferred to beneficiaries without using a will or a trust, many other assets might not be transferred to a person’s heirs without taking some additional steps to plan one’s estate. Wills offer a way for benefactors to transfer their wealth to heirs, but these documents are generally verified by the courts in probate. This can take a long time and may be costly because the court charges fees. Probate also makes the contents of a will a matter of public record.
In contrast, individuals who used revocable living trusts as part of their estate plan might be able to avoid some of these issues. The trust may be able to transfer assets to beneficiaries more quickly, is usually able to avoid court costs and keeps the contents of the device private. In addition, while the assets must be retitled to the trust, a person can remain a trustee and have full control of those assets. Furthermore, a successor trustee can be named to take over the duties of managing the assets if the original trustee passes away or become incapacitated.
When planning an estate, in addition to the vehicles used to transfer wealth, it might also be important to consider the individuals who are responsible for executing those plans and those who will receive the assets. An attorney who is familiar with trust planning may be able to help a client choose the device that might suit their needs and help determine who should be named a trustee or will’s executor.
Source: The Huffington Post, “Death Deal: Will or Revocable Living Trust?”, Terry Savage, September 22, 2014