If you have never established an estate plan, the words “will” and “trust” may be one and the same to you. But the reality is that comparing a will and a trust is like comparing apples and bananas; yes, they are both fruits, but each is unique. What is the difference between a will and a revocable trust?
First, let’s start by looking at how a will and revocable trust are alike. Both are estate planning documents meant to ease the burden on your loved ones upon your passing. Both a will and a revocable trust are used to establish directives for distributing your assets upon your death, and (hopefully) eliminating any clashes or discrepancies between heirs or beneficiaries.
That is where the similarities end though. Let’s look at the main ways wills and revocable trusts differ.
- A will goes through probate upon your death. This means that a probate proceeding will be opened with the court. The court will admit your will to probate and appoint a personal representative to handle your final affairs. In contrast, a revocable trust does not go through probate, nor is the process made public through a court.
- Revocable trusts can allow for more flexibility than wills. Both can be updated at any time while you are alive and have capacity. However, for your revocable trust to work as intended, you must re-title your assets in the name of the revocable trust, so that your assets will be handled pursuant to the terms of the trust during your lifetime and at your death. For this reason, revocable trusts can require more work up front to re-title assets in the name of the revocable trust.
- There is also a difference regarding when each takes effect. A will only takes effect at your death. The revocable trust takes effect upon its creation. However, how your assets are titled at your death (whether in your name, jointly or in the trust) will determine if a probate proceeding will be necessary.
These are just a few ways that wills and revocable trusts differ; there are many nuances and considerations to take into account based on your personal situation when creating an estate plan. If you are ready to give your loved ones peace of mind for the future, call an estate planning attorney at Brown Law Firm, LLC. Our lawyers are experienced on the ins and outs of estate planning. We take the time to get to know you: your desires, your future wishes, your needs, and any and every small detail that may determine the right kind of estate plan for you. Call (303) 339-3750 to get started today.