Pros and Cons of Revocable Living Trusts
Hello, my name is Steve Cortes at the Cortes law firm. And this is the second of six quick educational videos in a series on estate planning. If you missed the first video, then you can use the link below this video to watch it. And if you have any questions along the way, please don't hesitate to give me a call.
Our topic today is the difference between a will and a trust. So are you confused about the differences between a will and a trust? If so you're not alone. Today's video is a quick rundown on the differences between the two.
To Help You Make the Right Decision
First, what can a revocable living trust do that a will cannot do? The first thing is avoiding guardianship proceedings. A revocable living trust allows you to pick someone you trust to manage your assets should you become incapacitated and unable to manage your own affairs. Wills only become effective when you die. So they are useless in avoiding guardianship proceedings during your lifetime.
Third, a trust allows you to maintain privacy after your death. And it protects your family's privacy. However, wills are public documents and trusts are not. So anyone with an internet connection can discover the details of your estate if you have a will.
Fourth, a trust can help protect you from court challenges. Attacking a trust is generally much more difficult than attacking a will because a probate provides a forum, the court, for someone to appear and attack the will.
Now lets talk about what a will can do that a trust cannot do. First, a will can name guardians for your children. Only a will can name guardians to care for minor children.
Second, a will can specify an executor. Wills allow you to name a personal representative to wrap up your estate after you die. This typically involves working with the probate court, protecting assets, paying whatever debts you have, and distributing what remains to your heirs. But if there are no probate assets in your probate estate because you have a fully funded revocable living trust, then this feature is not necessarily useful.
Last, what can both wills and trusts do? Both wills and revocable trusts can be revised whenever your intentions or your circumstances change. Both wills and trusts allow you to name beneficiaries for your assets. Now wills simply describe assets and state who gets them. While trusts are similar, you must go one step further and transfer property into the trust. This is commonly referred to as funding. Only assets in the name of the trust will be controlled by your trust.
So to recap, I hope you can see that some of the differences between wills and trusts are subtle, while others are not at all. But together we can discuss your goals, as well as your family situation, and design an estate plan tailored to your specific needs.
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I hope you're findings these videos helpful. Watch out for our next video, it will describe the Oklahoma probate process and why you might want to avoid it. If you're already ready for a free estate planning consultation, just call us or use the link below to self schedule yourself. Thanks again, and we will see you next time.