REVOCABLE LIVING TRUSTS V. TESTAMENTARY TRUSTS: What’s the Difference?
We at Your Hometown Attorney are thrilled to share our knowledge and expertise in the field of estate planning with prospective clients, particularly those located in the beautiful state of Georgia. Creating and preserving our client’s legacies is our greatest passion!
Estate planning is a vital part of personal finance and asset management. Yet, it can often be complex and intimidating, especially for those unfamiliar with the legal intricacies involved. That's where we come in. Our job, and indeed our passion, is to make this process as simple, understandable, and beneficial for you as possible. One common area of confusion in estate planning is understanding the differences between a revocable living trust and a testamentary trust. These are two distinct legal entities with their unique pros and cons.
A revocable living trust, as the name suggests, is a legal entity you create during your lifetime to hold and manage your assets. The primary advantage of such a trust is the flexibility it offers. You can amend, modify, or even revoke it at any time during your lifetime, provided you are mentally competent. This feature gives you excellent control over your assets and allows you to react to changes in your life circumstances.
On the other hand, a testamentary trust is a trust that only comes into existence after your death. It is created by a provision in your will and only takes effect after the will has passed through probate. While it can serve a purpose, particularly for those with simple estates or specific testamentary intentions, it lacks the flexibility and control that a revocable living trust offers.
So, why do we usually recommend a revocable living trust?
For starters, it avoids probate, a legal process which can often be costly and time-consuming. This savings in both time and money can be a significant advantage for your beneficiaries. While it's true that setting up a revocable living trust may cost more upfront than drawing up a simple will, the cost and time savings down the line can more than make up for it. Probate can be a lengthy and expensive process, and having a revocable living trust allows your estate to bypass it.
Secondly, a revocable living trust allows you to maintain control over your assets during your lifetime. You can change the trust terms if your circumstances, needs, or wishes change, providing you with a flexibility that is simply not possible with a testamentary trust. When creating a revocable living trust, you'll name yourself as the trustee to maintain control over your assets. Upon your passing, a successor trustee that you've appointed will step in to manage or distribute the assets according to your wishes. This handover is typically smooth and immediate, ensuring that your loved ones are not left in a lurch.
Moreover, revocable living trusts cover incapacity. If you become mentally incapacitated due to an accident, illness, or advanced age, your successor trustee can step in to manage your affairs. This can't be done with a will or a testamentary trust, and the court may have to appoint a conservator or guardian, a process that can be time-consuming and expensive.
Lastly, a revocable living trust provides privacy. Unlike a will, which becomes public record once it passes through probate, a trust remains private. When a will goes through probate, it becomes a public record, and anyone can access it. This means that the worth of your estate, the names of your beneficiaries, and your wishes are all open to public scrutiny. A revocable living trust, on the other hand, is not subject to probate and remains private. This feature can be advantageous for those who prefer to keep their estate affairs out of public view.
As Your Hometown Attorney, we bring our extensive experience and nuanced understanding of estate planning to the table. We understand that every client's situation and needs are unique, and we tailor our advice and services to match your specific requirements, needs, desires, and family structure. Our goal is to ensure your peace of mind, answering all your questions, addressing your concerns, and guiding you through the estate planning process.
In our endeavor to serve you better, we keep ourselves updated with the recent developments and changes in the field of estate planning law. This way, you can rest assured that the advice and services you receive are not only personalized but also in line with the latest legal best practices. We also offer Legacy Preservation services where you can continue to update your Estate Plan as life circumstances, people, desires, and the law change. You can rest assured we’re not a one-and-done office as we continually focus on assisting you in maintaining your Legacy. We look forward to the opportunity of serving you, guiding you through your estate planning journey, and preserving your legacy for you and your loved ones.
If you’d like more information or are ready to preserve your legacy, contact Your Hometown Attorney by calling 706-359-3332 or by e-mailing clientservices@turnerjoneslegal.com. We look forward to serving you and your family!