Phone: (612) 604-5146
Fax: (952) 224-7209
Kathy.Tatone@YourFamilyGuardian.com

Do I need a Last Will and Testament or a Revocable Living Trust?

Most people use either a Last Will and Testament or a Revocable Living Trust as their primary Estate Planning instrument.  So what’s the difference?  Both instruments control the distribution of assets to loved ones upon death but the manner in which this happens is one of the main differences between these two documents.

A Last Will and Testament has no effect until an individual dies and it has no effect until the Personal Representative of the Will petitions the Probate Judge to declare that the Will was validly executed under the laws of the State of Minnesota (sometimes called “probating the Will”).    This legal process involves filing several documents with the Probate Court, notifying beneficiaries under the Will and next of kin of their right to a hearing in front of the Probate Judge to contest the Will and notifying creditors of the decedents death among other things.  If nobody contests the Will, then the Probate Judge issues Letters of Testamentary to the Personal Representative which allows him or her to collect the assets of the estate and eventually distribute the assets to the beneficiaries under the Will.

A Revocable Living Trust will be effective upon the signing and execution of this instrument.  Once established, the next step involves transferring assets into the Trust.  Upon death, all of the assets in the Trust will pass to the beneficiaries named in the Trust without Probate Court involvement.

In comparison, the main difference between a Will and a Revocable Living Trust is that the Will must go through the Probate Court system.  Because a Trust avoids the Probate Court, administering a Trust upon death is generally quicker and more cost effective than probating a Will.  The time frame for probating a Will is generally six months to one year even if it is a relatively simple estate and nobody is contesting the Will.  This is because the estate must remain open for at least six months to allow creditors to make claims against the estate.  Attorney’s fees and out of pocket expenses for individuals are usually higher when probating a Will.  If a decedent owned real estate in more than one State, then the Will must be probated in each State (increasing time and expenses).  Avoiding Probate Court means that a Revocable Living Trust is more private than a Will because a Will becomes a public record that anybody has the right to see.  Lastly, a Revocable Living Trust is harder for disgruntled heirs to contest than a Will.

While a Revocable Living Trust generally works better for a decedent’s loved ones upon death it is not the best fit for everyone.  A Trust requires more work to initially establish than a Will because you have to transfer assets into the Trust after its creation.  If assets are not properly transferred then the Trust may not operate as smoothly as it should have upon death.  Additionally, a Trust is generally more expensive than a Will to initially establish.

In conclusion, a Last Will and Testament and a Revocable Living Trust are both proper Estate Planning instruments and I recommend that you implement the one that best meets your Estate Planning goals.

For more information contact Kathy Tatone, Your Family Guardian Law Firm, 612-604-5146, 4500 Park Glen Road, Suite 220, St. Louis Park, Minnesota 55416.

 

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