A revocable living trust can be a powerful estate planning document. It has several advantages over a traditional will, and some experts recommend forgoing the will entirely in favor of a trust. However, there are also limitations to a living trust. In situations that a living trust does not address, it can be very helpful to have both a will and a living trust to ensure that you have planned for every contingency.
Benefits of a Living Trust
If you’d prefer to keep the details of your estate private, you should consider a living trust. When a traditional will goes to open probate, it becomes a matter of public record. A living trust does not go to probate and does not become a matter of public record unless someone files a lawsuit challenging its validity. If there is no challenge, no one but your heirs and appointed trustee need ever see the documents. Because trusts do not go to probate court, your heirs can receive their bequests more quickly without having to pay the expense of court costs.
Your last will only goes into effect when you die. It does not address the possibility of your mental incapacitation. You can include provisions in your living trust that the trustee you name takes responsibility for the assets in the trust in the event that you become mentally incompetent. This dispenses with the need for the court to name a conservator to manage your finances because you have already named the individual whom you would like to take the responsibility and the conditions that must be met before he or she can do so.
Limitations of a Living Trust
If you owe taxes or other debts when you die, it becomes the responsibility of the estate administrator to pay these off. A trust does not allow you to provide instructions for how these debts are to be handled after your death, but you can provide such instructions in a will. A will also allows you to name an executor to be in charge of administering your estate. The executor of your will may or may not be the same person you choose as a trustee.
If you have minor children, you have a responsibility to name a guardian to take care of them in the event that you die before they come of age. A trust typically only deals with property, so most people choose to name a guardian for their children in their will.