While either a Will or a Revocable Living Trust enable you to name someone to handle your financial affairs and distribute assets to beneficiaries at your death (an "Executor" or "Personal Representative" in a Will or a successor "Trustee" in a Revocable Living Trust), a Will only operates at death and assets passing by Will go through probate, whereas a Revocable Living Trust operates during life and death. In a Revocable Living Trust, you can name a successor Trustee to step in to handle your financial affairs if you become incapacitated without having to go to court for a conservatorship or guardianship. In addition, a Revocable Living Trust allows assets to pass at death completely free of Probate.
A Revocable Living Trust is a private contract between you as "Grantor," alternatively referred to as "Settlor" or "Trustor" (the person granting assets to the Trust) and you as "Trustee" (the person managing the assets) for the benefit of the beneficiary (you while you are living, and others, typically your children, other individuals, or charities, after your death). You need to transfer your assets (e.g., real estate, brokerage accounts) into the Revocable Living Trust, generally with the assistance of an attorney. You continue to control and manage the assets as you do now, but upon your incapacity, your named successor Trustee can manage the assets without a court having to appoint a conservator or guardian. Upon your death, your successor Trustee will distribute the assets to your beneficiaries, privately according to the terms of the Trust, thereby avoiding probate.
What does a basic estate plan typically consist of? 1. Revocable Living Trust 2. Pour Over Will 3. Financial Power of Attorney 4. Advance Health Care Directive or Health Care Power of Attorney and Living Will 5. HIPAA Authorization
Why do you still need a Will if you have a Revocable Living Trust? A Revocable Living Trust only works as to assets that are actually transferred to the Trust. Therefore, a Will is still typically prepared in conjunction with a Revocable Living Trust, but it is a “Pour Over Will" which serves only as a safety net - to catch any assets that may not have been transferred to the Trust before death so they can be "poured over" into the Trust at death and distributed according to the Trust's terms. However, all assets passing by Will must go through the probate process before they are transferred to your Trust. That is why it is so important to have the Trust properly funded before death so the Will never has to be used. Guardians for minor children are nominated in your Will.