Revocable Trusts and Wills serve many of the same purposes. The major difference between wills and trusts is a trust is active during your lifetime, while a will takes effect after your lifetime. However, there are a few other marquee differences between the two that must be considered before choosing which to make as part of your estate planning.
Delegation Ability. Revocable trusts allow you to pass on assets and other items during your lifetime. While revocable trusts may be a great way to plan your estate, there are a few things a revocable trust cannot do that a will can do, including: naming guardian of children, naming a property manager of children's property until they are 18 years old, and how your debts and taxes should be paid at the time of death. A will can include all of these items.
Privacy. Revocable trusts are private. They do not become part of probate when administering an estate, and therefore are not a part of public record. This allows a family to keep its matters private, and can prevent anyone from challenging it in court. A will, on the other hand, must be probated, even with an independent executor (see article here regarding wills in Texas), and therefore will become a public matter, and may be challenged by beneficiaries and others.
Cost. Revocable trusts are more likely than not be more expensive than a will. A revocable trust requires more documentation to be drafted by an attorney, including the creation of the trust, and the drafting of documents to officially fund the trust with whatever is decided will be in the trust (in other words, transferring ownership of said property to the trust). Also, a "pour-over will," which is a will that must be created in tandem with a revocable trust to ensure that anything not in the trust at the time of death is still passed on according to your wishes, will also need to be drafted by an attorney. When using a will as the main medium of estate planning, depending how complicated and large the estate is, it can be the only document drafted by an attorney necessary to effectuate your wishes. However, in the long term, a will must be probated, and therefore the cost of probating the will should be factored into the decision between a will and a trust.
Transfer of Property. As mentioned above, a transfer of property is required to "fund" the trust. This can be an added hassle for some people. A will, on the other hand, requires no transfer at the time of creation.
Whether you choose a Revocable Trust or a Will, it is important to create other estate planning documents as well, such as advanced healthcare directives (see here for more information) and access information for online accounts and digital content. If you do not have an estate plan in place, you should contact a local estate planning attorney.
--Charlton M. Messer, Esq.
This article is intended for informational purposes only.