When it comes to protecting your family and assets, you want to ensure you have the right documents in place for your circumstances. Both a will and a revocable trust allow you to name beneficiaries for your assets. Other than that, they are useful for different purposes.
A will outlines your specific wishes, as well as distributing your assets after your death. This could include instructions on who you’d like to receive your real estate, vehicles, personal possessions, etc. A will can also allow you to choose who will make your decisions in the event of your disability.
Here are two ways a will could benefit you:
You want to have a fairly simple, written out list of who gets your assets and how;
You want to have an executor named who will carry out your directions when you are gone.
Property left in a will goes through probate. Probate can be a lengthy, costly process that many want to avoid. You can read more about probate here.
A revocable trust can essentially be defined as a substitute for a will, because it distributes your property in the same manner. The difference is that a revocable trust has a big advantage. It allows you to avoid the long, expensive process of probate. A trust does require more time and effort planning wise, but if you have a large number of assets, it may help your family in the long run. Unlike a will, a revocable trust becomes effective immediately. You can be fully in charge of your trust while you are alive. And then, when you pass away or become incapacitated, the person you have appointed can step in to handle your affairs how you have laid out in the revocable trust.
A trust could benefit you if:
You want to avoid dealing with probate;
You want to reduce your taxes;
You want to protect yourself while you are still alive.
Propery left through a trust will not pass through probate. Because of this, it can be distributed straight to beneficiaries after the death of the grantor, without interference or fees from the court.
Simply put, here are some advantages and disadvantages of both wills and recovable living trusts.