Probate, Wills & Revocable Living Trusts

Probate, Wills & Revocable Living Trusts

Probate is simply each state’s set of rules for governing the administration of your will, or for distributing all your earthly goods in the event that you die without an estate plan. The term “probate” comes from a phrase that means “proving the will,” so by that very definition, if a will is used to transfer assets to beneficiaries, those assets will necessarily be subject to the probate process. The costs of probate vary significantly from state to state; in many states, the costs are quite limited, while in other states, they can be substantial.

If you want to avoid probate, then the tool to use as your primary estate distribution document is not a will, but rather a revocable living trust (RLT). Like a will, the RLT determines what will happen to the assets of your estate at the time of your death. Unlike a will, however, assets that are in the RLT at the time of death will transfer to your beneficiaries completely outside the probate process.

The RLT has many advantages over a will: most notably, it allows you to avoid probate. It also has the advantage of being private: none of it is subject to public record. In addition, it is much harder to contest successfully. The disadvantage of RLTs is that they are more expensive and more difficult to maintain than wills. To learn more about revocable living trusts, (click here).

In deciding whether to use a will or a RLT as the primary instrument of your estate plan, it is important to assess the importance you place on the various advantages of the revocable living trust. For most people, the overriding factor in this determination is the importance of avoiding probate.

As a general rule, our experience is that individuals residing in states with low probate costs typically opt for wills in their estate plans. Conversely, individuals residing in states where probate costs are high tend to use revocable living trusts. To reduce the cost of probate, many states have adopted the Uniform Probate Code. To view a current list of these states, (click here).

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