The Difference between a Will and a Revocable Trust
A revocable trust and a will are both estate planning tools, but they serve different purposes and have distinct characteristics. Here are the main differences between the two:
- Will: A will is a legal document that outlines how a person’s assets and properties will be distributed after their death. Upon the person’s passing, the will must go through the probate process, during which a court verifies the will’s validity, settles debts and taxes, and distributes assets according to the will’s instructions. The probate process can be time-consuming, costly, and subject to public record.
- Revocable Trust: A revocable trust, also known as a living trust, is a legal entity created during a person’s lifetime to hold and manage their assets. When the person passes away, the assets held in the trust can be distributed to the beneficiaries without going through probate. This can help avoid the time and expense associated with probate and provide for a more private distribution of assets.
- Will: A will becomes a matter of public record during the probate process. This means that the contents of the will, as well as the value of the assets and the identities of the beneficiaries, become accessible to the public.
- Revocable Trust: A revocable trust, on the other hand, allows for greater privacy. Since the trust doesn’t go through probate, its contents and beneficiaries remain private.
- Flexibility and Control:
- Will: A will allows you to appoint an executor who will carry out your wishes and distribute your assets. However, a will only takes effect upon your death and can be revised or amended as long as you are mentally competent.
- Revocable Trust: A revocable trust provides more flexibility and control over your assets during your lifetime. As the grantor, you can serve as the trustee and maintain control over the trust’s assets. You can also change or revoke the trust terms or appoint a successor trustee to manage the trust if you become incapacitated or pass away.
- Incapacity Planning:
- Will: A will does not provide any provisions for managing your assets in the event of your incapacity. In case of incapacity, a court-appointed guardian or conservator may be required to manage your affairs.
- Revocable Trust: A revocable trust includes provisions for managing your assets if you become incapacitated. Since you serve as the trustee during your lifetime, a successor trustee can step in to manage the trust’s assets if you are unable to do so.
- Property Ownership:
- Will: A will only governs assets that are solely owned by the deceased person in their individual name. Assets held jointly with rights of survivorship, or those with designated beneficiaries (e.g., life insurance policies, retirement accounts), pass directly to the joint owner or designated beneficiary and are not controlled by the will.
- Revocable Trust: With a revocable trust, you need to transfer ownership of assets to the trust to have them governed by its terms. This process, called funding the trust, ensures that the trust controls the assets, allowing for the seamless distribution of assets after your death.
It’s important to consult with an estate planning attorney to determine the best approach for your specific situation and goals. Both a will and a revocable trust can be valuable components of a comprehensive estate plan.
To learn more about estate planning and elder law, visit Estate and Elder Planning by David Wingate at www.davidwingate.com. For an Initial Consultation, call (301) 663-9230. We can assist you with powers of attorneys, living wills, wills, trusts, Medicaid planning, and asset protection. With office locations in Frederick, Washington, and Montgomery Counties, Maryland, we are here to provide you with peace of mind.
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