When creating an estate plan, it's important to understand the steps your family will face after your death. More specifically, the probate process.
With a will, your estate will go through probate. Not only can this drag out the process of distributing your assets, but it can also cost a good amount of money.
This is why many people choose to create a revocable living trust. It allows your estate to avoid probate, thus saving your family time and money.
Creating a revocable living trust is different than a will, as you're transferring assets to a trustee. This essentially means the trustee has ownership of the property, despite the fact that you have full authority to revoke it at any time.
Since you're not technically the property owner, all assets within the trust avoid probate. This allows for the immediate transfer of property after your death.
Another point worth noting is that a revocable living trust is private -- unlike a will, which is a public document. This allows for privacy in regard to what you leave behind and who receives the property.
When setting up a revocable living trust you'll want to answer questions such as:
- Who makes the most sense as trustee?
- What assets will you move into the trust?
- Who will you name as the beneficiary?
If you're seeking a way for your estate to avoid probate, consider the creation of a revocable living trust. There are other ways to do this, but a trust provides a high level of protection and reliability.
If you find yourself faced with the probate process, perhaps because a loved one didn't move all their assets into a revocable living trust, it's critical to understand what to expect and where you fit in.