Two are two main ways for you to set the terms for how you want your estate distributed upon your death. A last will is a legal instrument that appoints someone as an executor to administer the will’s instructions under the supervision of a probate court. A trust is where a person or organization manages property on your behalf, and a revocable trust is one that you can amend or cancel.
A person who drafts a will is referred to as a “testator.” When the testator dies, she is considered a “decedent.” A testator appoints an executor, or personal representative, to administer the estate upon the testator’s death. The executor must file the will for probate once the testator dies. Probate is the legal process where a judge verifies and authenticates the will and oversees the executor’s administration of the estate, settling disputes when disputes arise. With a revocable trust, a “settlor” grants specific property to the trust. The “trustee” then assumes control over the property. The settlor typically names himself as trustee to maintain control over his assets while living. The settlor may appoint a “successor” trustee to take control over the trust in the event of the settlor’s death or incapacitation.
One major difference between a revocable trust and a will is that with a revocable trust, the estate may avoid the possibly costly and time-consuming probate process. Unlike a will, a revocable trust is not subject to the court-supervised probate process; the successor trustee disposes of the assets in the trust pursuant to the terms stated in the trust’s declaration.
A probated will is a publicly available record in many states. For some, the fact that a will becomes public in the probate process causes no concern. For others, privacy in the distribution of their estate may be an important concern. In the probate process, the court typically inventories the estate’s assets and, as with the rest of the proceedings, this become publicly available information.
Individuals with significant assets often create both a last will and revocable trust. The law does not make these instruments mutually exclusive. However, any property not placed in the trust may be subject to probate. To avoid probate all together, you may be able to put all assets -- including real property, personal property, bank accounts and all investment portfolios -- in the trust. In these cases, the will typically does not state how the assets will be distributed, but instead “pours into” the revocable trust. This type of will is typically referred to as a “pour over will.”
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