To understand differences between a revocable living trust and a will is important to understand the mechanisms, in which the passing down of property and assets occur, upon the death of an individual. Both methods achieve the same purpose, differently, and it is solely in the hands of the individual, who is the donor, to decide which method to use.
By using a revocable living trust, the donor surpasses the complex and costly probate process that accompanies the following of a will. This saves taxes in the process, and it also does not require the use of an attorney, which is not the case with the latter. This does not mean that it is better than a will, since both methods have their own pros and cons.
A last will and testament document is a set of instructions set by a person, having details of how the assets will be distributed upon his death. This will is final, and can't be altered. It is the responsibility of the person's attorney to ensure that its orders are carried out properly. This document is recognized by the legal system and enforced by law.
On the other hand, a revocable living trust implies that the person (or the organization) is granting fiduciary control of the trust fund to any assigned individual, while he/she is still alive.
When this individual dies, full control of this fund is passed on to the person mentioned. The party who assigns the fund is known as the grantor (or the settlor or donor), and the person who gets its control is known as the trustee.
When there is a will and a revocable living trust present at the same time, the latter takes precedence. This will always be the case because the trust comes into play as soon as it is created, even when the creator is alive. The will comes into the picture only when the creator dies, and thus, it will always be considered inferior to the trust fund.
Many legal experts claim that it is better to get the trust fund than a will due to the given reasons:
- The lack of the probate process, thus making the passing of assets a private and family affair.
- It also contains disability plans, which provide details about how the estate is to be managed, if the creator is disabled, or becomes mentally unstable in some way.
- The lack of probate process also brings down the cost of setting it up, in comparison to the will.
With so many advantages, things are much clearer; the affair stays within the family, and there is no need to involve any outsiders and attorneys, at any stage in the process. Another advantage is that its conditions can be altered anytime, and the trust can be revoked. This is the primary difference between a revocable and an irrevocable living trust.
With all these factors in mind, one should remember that it is better to choose the revocable living trust. There are many advantages of doing so, and it also gives the creator much more room to operate, and much more time to make a balanced and fair decision about estate planning and the distribution of his/her assets.