Will vs Revocable Trust – Reason No 3 Why a Trust is better
– Hi guys, today we’re gonna talk about Will vs Revocable Trust – Reason No 3 Why a Trust is better than just having a last will. Welcome to Two Minute Tuesday where I attempt to discuss an estate planning topic in two minutes or less. Probably the number one question we get is, What is the difference between a Will and a Revocable Trust? Which is why we’re doing this little mini-series that started with the last video to highlight some of the biggest differences between the two.
So, I guess the first thing I need to show you is how a Probate works and how a Revocable Living Trust Centered Estate Plan works. So, let’s switch screens. With a Probate at the center of everything we have the Probate Court and this is were really all the decisions get made. If you are in Probate then it is the district court judge who makes the final decisions on what happens with your estate. If there is not a last Will and Testament then they will follow Oklahoma statutes and, like I’ve said in other videos, you will probably not like how Oklahoma divides up your estate. You can see more of that in this video that’s up here. Now, let’s go back to the screen. Like I said, at the center of everything is the Oklahoma Probate Court. An estate consists of items like your house which is like your real estate or any other property that you own, bank accounts, savings accounts, checking accounts, certificate of deposits. And it also includes stuff like your investments, your retirement funds.
You’d be surprised at how many estates we see where folks do not name anybody as a beneficiary for their retirement accounts. And last we have personal items like jewelry, furniture, clothing and basically all the stuff that you own. So whether or not you have a last Will all of this stuff, your house, savings, investments gets funneled through the Probate Court. And this process can take six to nine months for a regular probate. We have some right now that are actually over a year.
And you’ve heard the old saying, Time Equals Money. So the longer a Probate takes, it usually means that the fees and costs are going to higher as well. And because this is a court case, it means that it is completely public and it means it’s also a public forum where anybody who wants to, can go and contest the assets. So whether it’s higher fees or greedy relatives Probate is gonna be expensive. Now, there is something called a Summary Probate which I’ve talked about in this video up here. So watch that video if you need more information. So whether it’s higher fees or greedy relatives Probate can be a slow and expensive process.
Now there is something called a Summary Probate which I have talked about in other videos so if you need that information, watch those. Now, let’s look at the same scenario with a Revocable Living Trust Centered Estate Plan. Now you’re estate still consists of items like your house, your real estate and any land that you own. Bank accounts like savings or checking accounts and certificate of deposits.
However, if done correctly, all of these items are titled in the name of the Trust. So the house, money, investments and personal items are all funneled through the Trust document itself. The Successor Trustee, your Successor Trustee gathers all of these items together and distributes them according to your wishes without court intervention. The process also avoids Guardianship Hearings to appoint someone to take care of you while you’re still living and incapacitated.
It avoids probate and the court completely if it is properly funded. It is a private process, no one has access to the trust documents except those that should have access. And because there is not a probate, there are not high Probate fees. With Revocable Centered Trust Estate Plan we create six main documents. The first is the Revocable Trust itself that states your wishes for what you want to happen during your lifetime and after your lifetime.
A Pour-Over Will is a backup and you can watch more about Pour-Over Wills in this video. A Durable Power of Attorney covers your finances. A Health Care Power of Attorney is there to take of you when you’re incapacitated. And as you’ve probably heard about a Living Will and hip organizations are also part of this. And they all work together to protect you, your family and your assets. So as you can see a Revocable Trust can be a much more streamlined process when compared to a Probate. Now, next week we’ll discuss the Probate process step by step and you’ll see why, I think, a Revocable Trust is really the better option. Well, that’s all for today. As always I hope you have a great day and an awesome week. Thanks again and we’ll see you next time.