Benefits of a Revocable Living Trust
Almost
everyone thinks of a Last Will and Testament when they consider estate
planning. However, under certain circumstances, one of the most useful estate
planning tools is the revocable living trust. Estate planning is not just for
the rich and famous or extremely wealthy. It is important for every person to
have a financial plan for their beneficiaries to follow after they pass away.
One of the options available is the revocable living trust.
Revocable Living Trust
A
revocable living
trust
is an estate planning document that divides assets following a person’s death,
similar to a last will and testament. Assets may include a family home,
vacation property, savings or checking accounts, investments, retirement plans,
or even family heirlooms. The revocable living trust is created during a
person’s lifetime and is, as the name suggests, revocable. The assets of this
trust may also be used by the creator during his or her lifetime, which is
quite different from a last will and testament.
Differences Between a Last Will and
Testament and a Revocable Living Trust
Due
to the fact that most people seem to gravitate towards a Last Will and
Testament, this listing shows the differences between a revocable living trust
and a last will and testament. Understanding these differences will help you
determine which estate planning document is right for you, or if you may want
to consider including them both in your estate plan.
●
Wills are completely public information as they go through
the probate process, trusts are completely private.
●
Wills distribute an estate to adult beneficiaries following
someone’s death, whereas a trust allows the distribution of assets to minor
children incrementally throughout their lives, which allows a guardian to care
for them following his or her death.
●
Wills only divide and distribute property following a death,
whereas a trust can easily transfer assets to beneficiaries during a person’s
lifetime, or after a person’s death.
●
Wills are required to go through the probate process, which
is a legal process involving the courts, whereas a trust is private and never
needs to go through the probate process.
●
Wills are unchangeable after they are executed, and can only
be changed by executing an entirely new will. A trust can be flexible and can
be changed throughout a person’s lifetime.
●
Trust assets receive the benefit of FDIC protection up to $250,000 per each beneficiary
up to a total amount of $1,250,000.
●
Wills tend to be easily challenged, whereas trusts are more
difficult to challenge after a person’s death.
Contact an Experienced Estate Planning Attorney
If
you are considering beginning the estate planning process, you likely have many
questions. We would welcome the opportunity to answer your questions and help
you determine what estate planning documents are right for your unique financial
situation. Contact an experienced estate planning attorney at the law firm of Giro Law at 201-690-1642 to help you
understand how to protect your legal rights and how you can best protect your
assets for your beneficiaries following your death.
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