There are plenty of options for one to pass on the inheritance to the next generation when it comes to estate planning. A will and living trust are two of the most common estate planning strategies used by people. Both a will and a revocable living trust come with benefits and shortcomings. Before settling on one solution, you should consult an estate litigation lawyer for professional advice.
In this blog, we will look into some differences between a will and a revocable living trust.
Will Vs. Revocable Living Trust
Will: A will is a legal document that helps a person dictates how his/her property will pass on to the heirs. You can instruct the executor how your belongings will be distributed to your family and friends after your death through a will.
Revocable trust: A revocable living trust is more like a contract drawn between the grantor (the one who forms the trust), the trustee (the person who manages the assets in the trust), and the beneficiaries named in the trust.
People assume that they only have an estate plan if they have a will. In reality, this is not the case. Each state has its own decrees and statutes determining how a person’s assets will pass on to its surviving member. Unless you don’t have a will drafted in advance, your wishes regarding how your assets should be distributed will not execute.
To ensure your assets go to the ones you want, you should have a will prepared by your lawyer. While there are other instruments and methods to transfer your assets to the surviving spouse or family members, the will makes the process easier.
Since life is uncertain, one must consider preparing a will as soon as one becomes eligible. One must be 18 or above to be able to have a will. Since the process of drafter a will or a trust is complicated, one must hire an estate attorney Virginia.
How does a Revocable Trust work?
If you choose to have a living trust, you can enjoy more control over your assets and finances even if you become incapacitated. When preparing your trust, you can choose a trustee who will look after your finances and make financial decisions on your behalf according to your wishes.
A living trust also makes it easier for one to manage the probate process. If you have the Pour-Over Will document, your assets will not go through the probate. The document lets the court know that your trustee is handling the estate and overseeing its distribution.
Besides this, the assets you have left to your spouse or loved ones through the trust are creditor protected.
Unless you die or become incapacitated, you will have full control over your assets even if you have put them in the trust.
If you are unable to make financial or health decisions due to your ailing health, these responsibilities will pass on to the trustee. Whoever you have made the trustee has a legal fiduciary duty to abide by the trust terms. They will have a legal obligation to take care of financial decisions as per your wishes. Like other estate plans, you can update or change the terms whenever you want.