Common Mistakes: Wills and Revocable Living Trusts
There are always pitfalls that are associated with estate planning. Each document that is part of your estate plan has their own unique feature. An important, yet less known, example of a key estate planning document is a Revocable Living Trust. Although this is a powerful document that can be part of your estate plan, there are several mistakes that may come along with using this document which you should be aware of.
What is a Last Will & Testament?
A Last Will & Testament is a legal document which has a tremendous amount of power after you pass away. A Last Will & Testament names an individual who will serve as your executor which is the person who will ensure that your estate is distributed according to your wishes. A Last Will & Testament is something that is submitted to the local probate court in your area at which point the individual that is named as your executor will be given formal authority to access bank accounts, other assets and so that they can be distributed to your beneficiaries.
What is a Revocable Living Trust?
There are many similarities when it comes to a Last Will & Testament and a Revocable Living Trust in the sense that your residuary assets can be distributed through your trust to your beneficiaries. The main difference between these two documents is that all of the assets that fall under the umbrella of your Last Will & Testament will need to go through the probate court while you can administer a Revocable Living Trust without going through the probate court which can help your beneficiaries to save standard probate fees and additional time and expense.
Mistakes to Avoid When It Comes to Will and Revocable Living Trusts
Now that you have a better understanding of the differences between a Last Will & Testament and a revocable living trust, here are some of the mistakes that you need to avoid ensuring that your estate plan stays intact:
- Avoid do it yourself documents
It’s important to remember that these are legal documents. Therefore, you should never try to put them together unless you have the guidance of an experienced attorney. Making any type of error on one of the provisions for either document could lead to catastrophe for your beneficiaries after you pass away.
- Neglecting to fund the trust
One of the biggest mistakes that a person can make is to not fund their Revocable Trust during their lifetime. Your attorney will be able to walk you through this process to ensure that you will receive the most benefit from this process.
- Not realizing that a revocable trust is changeable
When a person hears the word “trust”, they may get nervous that they are committing their assets to a plan where they will no longer be able to access them. However, when you develop a revocable trust, one of the best things about it is that you can change it at any time. If you need to modify the trust, you can always develop an amendment or you can make additional changes in terms of how much you fund the trust. This can help you to breathe easier knowing that you can still have access to those funds.
Schedule Your Appointment to Learn More About a Living Trust and a Last Will & Testament
Do you have more questions regarding a living trust and a Last Will & Testament? If the answer is yes, then it’s imperative that you get in touch with our office and schedule an appointment. We will walk you through the benefits of these documents so that you will have an estate plan in place that gives you the peace of mind of knowing that your wishes will be followed when you pass away. Get in touch with us and book your consultation today.