Revocable Living Trusts Compared to Wills
There are two types of estate planning documents that can be used to dispose of assets when a person dies: wills and revocable living trusts. The main difference is that when a Will is used as a person’s primary estate planning document, probate is necessary. If a funded revocable living trust avoids probate. So understanding the challenges of having to probate assets when someone dies can help explain why a revocable living trust is most often seen as a better alternative.
What is Probate?
Probate is a title process that transfers title from the name of a decedent to the name of his or her heirs. Each state’s probate rules are different – but in general probate requires (a) marshaling assets, (b) sending notice to heirs and to creditors, (c) resolving creditor’s claims, (d) paying taxes, (e) accounting for acts taken during probate administration, and (f) distributing the assets to the heirs of the decedent.
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