Whether you have just started a family or you have recently retired from a job, it is important to have a last will and testament in place. You never know when a tragic accident or catastrophe will warrant the need of this critical legal document. Yet, even if you have a will in place, you may also want to consider creating a revocable living trust. While some may think that they are one in the same, there are clear differences between the two and benefits to having both.
A last will and testament contains clear and concise directions on how to handle your property and assets once you pass away. This may include the following:
- An appointed executor or administrator to the estate
- A list of property and assets you own
- Beneficiaries who you would like to have your property and assets
- An appointed guardian to your children
If you should happen to pass away, your estate may enter into the probate process. This process is designed to help distribute your property to designated beneficiaries and finalize matters of paying taxes.
By setting up a revocable living trust, however, you may be able to bypass the probate process and transfer money and property directly to beneficiaries. Furthermore, assets placed in a trust are taxed differently than if they were included in a living will, such as lower federal estate taxes. A trust can help you rest assured your assets and property will get to the people you intended without having to travel through a legal probate process, which can inconvenience others.
Having both a will and a trust in place can help you and your loved ones should an unforeseen event occur.