When Washington residents think about estate planning options, many think the easiest step is to create a will. Often, this is the wise choice. However, there are alternatives that might be better for their situation. Knowing about them while assessing their assets and objectives can help with making an informed decision as to whether a will is a good idea. In some cases, a revocable living trust can be preferable. Knowing the difference is key.
Understand how a revocable living trust works
With a revocable living trust, the person who creates it is known as the grantor or the trustor. They will name another person to be the trustee to oversee the trust while the trustor is alive and after they have died. The trustor puts property into the trust and the trust will own the assets. The revocable living trust is particularly beneficial if the trustor is incapacitated.
The trust can pass the person’s assets to beneficiaries during their lifetime. For people with substantial assets, this could reduce the chance that there will be an estate tax. It also avoids probate which can be costly and time-consuming. It will shield assets from creditors. The revocable living trust can be changed whenever the trustor chooses to do so.
With a will, the testator will detail how they want their property distributed after they have passed on. That could include anything they own. Real estate, bank accounts, retirement accounts, jewelry, family heirlooms, automobiles – anything they have can be distributed. It is relatively straightforward. Still, a will makes probate necessary to prove its validity. Probate is a public record. The trust accords greater privacy.
Choosing between a will or a trust can be complex
People who are thinking about their estate planning options and are unsure if a will or a revocable living trust is right for them need to gather all the information possible so they make the right decision for themselves and their beneficiaries. Making a mistake can be costly. With that, knowing the positives and negatives of both can be helpful with making a choice that will protect them and their interests.