The Last Will and Testament and Revocable Living Trust are the most common documents used in estate planning. They are both legal documents that you can use to provide instructions about what happens to your assets upon your death. But, even though they can do the same thing, they are used for very different purposes. Unless you are a Brandon Estate Attorney and you work in the field, you probably don’t know what is best for your situation. While it isn’t possible to understand which you should choose from a blog post, here are two scenarios that will help you understand the basic differences.
Scenario 1 – Estate planning with a will only
If your primary estate planning document is a Last Will and Testament, you will do a bit of planning up front, but the majority of the work to disburse your assets will happen after you pass away. At the time of your death, the person you named as Executor or Personal Representative will have to start the estate administration process by going to probate court. The probate process involves several tasks such as filing documents with the court and notifying beneficiaries and other next of kin. The process also involves a waiting period to allow all potential creditors to make claims against the estate. Finally, the process is public and can be costly to your heirs—none of which is relieved by having a “will only” estate plan.
Scenario 2 – Estate planning that includes a revocable living trust
Creating a revocable living trust requires more work up front, but the transition process is much more seamless at the time of your death. A revocable living trust involves transferring all of your assets into the trust while you are alive, and it’s effective immediately upon signing. It is important to understand that all of your assets must be transferred out of your name and into the name of the trust for this legal tool to work properly, and this process takes some time. However, all of the assets will pass to beneficiaries named in the trust without the involvement of probate court.
For the most part, because a trust avoids probate court, the estate administration process for your loved ones is faster, less expensive, and is not a matter of public record as is a Last Will and Testament. There are also several tax reasons that you may choose to do a trust. Finally, a living trust allows you the chance to put stipulations and “speed bumps” around your family’s inheritance, so they are not given an entire lump sum of cash when the estate admiration process concludes. This benefit is not possible with a “will only” plan and protects your heirs from wasting or squandering their inheritance.
The best way to make sure that you understand all of the consequences your estate planning decisions is to speak to a qualified and experienced attorney. Feel free to call our office at 813-438-8503 for a free telephone consultation to find out which option is best for you and your family.