These two estate planning instruments represent two different takes when it comes to making plans to deal with your assets after death. Wills have been around for ages, and are considered to be at the front and center of any plans for disposing of an estate. Revocable trusts, on the other hand, are relative newcomers when compared to the will. Read on to find out more.
What to understand about wills and probate
In most cases, there is no way for a revocable trust to completely take the place of a will. When a person passes away, probate is the legal method of dealing with a person's estate. In this instance, the estate is not just the assets or property owned by the deceased, but also the money owed to creditors. Unless a person has almost no assets or debts, you can just count on an estate having to be filed in probate court, whether a will a exists or not. So, having a will or not has nothing to do with probate.
Probate court takes a look at the assets of the estate and the debts, and plans are made to take care of any bills owed, particularly bills like taxes owed for federal or state taxes and property taxes. If a will exists, probate court will follow the wishes of the deceased when it comes to dealing with any bequests. If no will exists, each state has their own method of providing assets to next of kin.
A trust trumps a will in some ways
This is where it can get somewhat confusing, but some people die with both a valid will and a revocable trust in place. While a will is excellent at making sure creditors are paid, a trust excels in other ways. Dealing with property is just one way, since the property named in a revocable trust goes automatically to the beneficiary. There is no need to wait for probate to be complete to distribute the assets of the estate when using a revocable trust; you can do so within a week or so after the death. This gets beneficiaries their property much faster. It should be noted that any property addressed in both a will and a revocable trust is automatically dealt with using the trust.
Additionally, unlike a will, which is a public record, trusts are confidential. No one beneficiary has any reason to know what any other is receiving from the estate. Only the owner of the trust, who is deceased, and the trustee, who acts a similar role as that of an executor, knows the full contents of the trust.
As you can see, estate planning is not an "either or" proposition. To have a complete plan, you should have both a revocable trust and a will. Speak to an estate law firm to learn more about these two methods and about even more ideas to make it easier on your loved ones after your death.