A Revocable Trust, also called “Living Trust,” is a more complete document than a Will. In the event of your incapacity, a Revocable Trust will organize your affairs better than a Power of Attorney and will organize the transfer of your wealth upon your death without court supervision.
During your life, a Revocable Trust is a transparent entity, meaning that nothing is changed in terms of managing your assets or reporting your income. You are the “settlor”, “trustor” or “grantor” of your Trust and you can be your own trustee.
In a Revocable Trust, you can give instructions to the trustee on how you want to be taken care of during a period of incapacity. In a Power of Attorney, you authorize an individual to access your finances, but this document has no instruction on whether you prefer staying home rather than going into a nursing home.
Upon your death, the trustee will distribute your assets without court supervision. A Will needs to be probated, meaning that the executor needs to file the Will with the court, be appointed by the court, and pay court costs. Court costs are calculated on the value of the assets probated.
Advantages of a Revocable Trust
Why should I choose to create a Revocable Trust rather than just a Will?
- A Revocable Trust provides an effective method for asset management and protection of resources in the event of illness or incapacity.
- With a Trust, you can provide instructions on how you want to be taken care of during a period of incapacity. For instance, you can provide instructions on whether you want to stay home rather than going to a nursing home and what should be the quality of care.
- The cost of probate is avoided. This is very important if you own real estate in different states. If you only have a Will, the executor will have to initiate the probate procedure in each state you own real estate and pay court costs based on the value of the probated assets. This can be time-consuming and very expensive.
- The supervision of the court is avoided. In most cases, the executor of your Will has to file an inventory and accounting with the court. Unless a beneficiary of a Trust requests it, the trustee will not have to file such documents with the court. However, the trustee usually has a duty to provide a report to the beneficiary. But such a Trust report does not need to be balanced to the penny or to be very detailed, while the requirements for a Will’s accounting are lengthy and strict, usually requiring the assistance of an attorney.
- With a Revocable Trust, you keep your privacy. When probated, a Will becomes a public document. Anybody can request a copy. You can avoid this if all of your assets are titled into your Revocable Trust.
For further information please contact Miorini Law, PLLC at (703) 448-6121 or to firstname.lastname@example.org.