For estate planning, one must choose either a last will and testament or revocable living trust. These documents differ in important ways. But for several reasons, a revocable living trust is probably the better estate planning tool.
A last will and testament requires probate. This is expensive and time-consuming. Probate also reduces privacy. Everything is filed in court. Thus, it’s public knowledge. By contrast, the court system has no involvement in administering a revocable living trust. Consequently, just the trustee, attorney and family members learn the details of your estate.
The second key distinction between a last will and testament and revocable living trust is incapacity. Whether due to a stroke, accident or Alzheimer’s disease, you may someday be unable to manage your financial affairs. A will only governs the distribution of estates after death, meaning it cannot deal with incapacity during lifetime. However, a revocable living trust takes effect immediately. If a trust’s creator later becomes incompetent, the successor trustee named in the document assumes legal responsibility for dealing with the trust property. This ensures payment of taxes, expenses and providing for your care.
Lastly, a revocable living trust offers more flexibility in estate planning than does a basic will. One can use a trust to protect assets from the creditors and divorcing spouses of beneficiaries. Furthermore, a knowledgeable estate planning attorney can structure a revocable living trust to reduce or eliminate estate taxes.
Estate planning is not something to be taken lightly. It requires careful consideration of one’s goals as well as personal and financial circumstances. Contact a Norman, Oklahoma estate planning attorney today to get started.