By Sativa Boatman-Sloan Attorney At Law
Springfield, MO— Wills and Revocable Trusts are beneficial planning documents used to pass assets on to beneficiaries after death. However, there are very distinct differences. To make the best decision for your family, you should know the three major distinctions between Wills and Revocable Trusts.
When a Will is administered, it must go through the court system and becomes public record. When a trust is administered, privacy is protected because all transactions are administered through the trustee, avoiding court.
Probate is the legal process by which the court system determines whether your Will is legally valid and appoints a Personal Representative (executor) to administer your estate. The objective of the court is to ensure your debts are paid out of your estate before any distribution is made to the beneficiaries as outlined in your Will.
The most well-known advantage of a Revocable Trust is avoiding probate. Any assets properly held in the trust or transferred upon death to the trust will avoid probate and pass to the named beneficiaries as set out in the terms of the trust.
A Will allows you to transfer assets upon death, but you have no control over how those assets are managed after your death.
In contrast, Revocable Trusts are flexible and can contain unique distributions to beneficiaries. For example, you can hold money in a trust to be distributed over time. Some families prefer to have their adult beneficiaries receive only a portion of their inheritance at one time and wait to receive the remaining amounts at later dates.
Although a Revocable Trust may be considered the principal document in an estate plan, a Will should accompany a trust. This type of Will, referred to as a “Pour Over” Will, names the Revocable Trust as the principal beneficiary. Thus, in the event it becomes necessary to probate any assets after your death (for example, if something was not properly transferred to the trust), it would ultimately go back into the trust and still be distributed to (or held for the benefit of) the beneficiaries according to the trust instructions.
Determining your need for a Revocable Trust involves an analysis of your goals and your personal and financial circumstances. However, everyone should have a Will even if it is just for the purpose of having a backup plan in the event something would inadvertently end up in probate.