A last will and testament allows you to name beneficiaries who will receive your assets in the event of your death. Having a living trust associated with that will can provide more options for how your assets are transferred, with several tangible benefits to you and your family:
- Probate: One of the advantages of the revocable living trust is that it circumvents the probate process at the time of death.
- Making changes: The nature of a revocable living trust allows for edits and changes to be made during the person’s life.
- Privacy: A will may be accessed via the public record when it enters probate. This process can lead to privacy issues since it opens the will to public records. If you would like to avoid your will becoming public knowledge, a trust could help portions of your estate avoid probate.
- Taxation: The assets listed in a revocable trust remain yours as the trustmaker and will include those taxes associated with you. These taxes could consist of income taxes, estate taxes or inheritance taxes. This form of taxation is different than in an irrevocable trust, where the trustmaker gives up the right to change the trust along with control of the assets included so that the trust may be taxed separately from you.
- Cost efficiency: Though revocable living trusts require upfront costs due to the complexity of the documents involved as well as the intricacies of your estate, they will likely end up more cost-efficient than probate.
Finding the estate plan that works best for you
No two estates are alike. The estate plan that works for one person’s particular situation may not be useful for another person’s. Drafting wills and trusts can quickly become a complicated process. It would be best to find an attorney with in-depth knowledge of estate planning to make sure your bases are covered.