What is probate?
Probate is the legal process that occurs after someone dies. During probate, it must be proven in court that the person's Will is valid, their property must be inventoried and appraised, taxes and debts must be paid (as well as the lawyers and court fees), and then the remaining property is distributed among the heirs and beneficiaries. Probate becomes a matter of public record at the time of the individual's death.
Benefits of a Living Trust
Living Trusts bypass probate, since technically assets you put in a trust are owned by the trustee, not you, so on your death the trustee can transfer your property and assets directly to your beneficiaries. Be aware that these assets are still taxable by federal estate tax purposes. You can convert bank accounts, stocks, and certain registrations to be payable-on-death, and joint-property can also be transferred directly. A Living Trust also allows you to manage your assets without having to create a Power of Attorney or Conservatorship, as you would under a Will. You can also use trusts to give away gifts while you are alive (ex: College Education Trust).
Benefits of a Will
In some cases setting up a Living Trust may not be worth the hassle and expense. Most states allow a certain amount of property to be passed on either without probate or through a simplified probate; furthermore, property left to a spouse can be transferred quite simply. Whereas Living Trusts require constant management and funding, Wills are simple to prepare, and it's easy to update them or create new ones when necessary.
Once you know which document is right for you, Rocket Lawyer makes it easy to create your Last Will and Testament or Living Trust online. You can also use our site to Find an Estate Planning Lawyerto review your documents.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.