Most people would like to arrange for their loved ones to receive their inheritances in a timely manner. Exactly when your heirs receive their inheritances will depend upon the estate planning decisions that you make beforehand.
You may be surprised to hear that you can simplify things with a revocable trust as an alternative to a last will. Let’s look at the facts.
The estate planning device called a last will or last will and testament is somewhat misunderstood by many people. It can seem as though a last will would facilitate very straightforward, timely, and direct asset transfers. In fact, this is really not the case.
When you create a last will to serve as a vehicle of asset transfer, you have to empower someone to administer the estate after you are gone. This is the executor, and in some areas, the estate administrator is called a personal representative.
You may envision the executor calling everyone into a room after the funeral for a reading of the will. The idea is that family members will be informed, and inheritances will be distributed shortly thereafter.
This is the mythical version that you see in movies and on television, but in reality, the executor cannot act independently. Under state laws, the executor would be required to admit the will to probate. The probate court would then supervise the administration of the estate.
This process is in place to provide certain protections, but there are a great many tasks that must be completed during probate. Final debts must be paid, so creditors must be notified. They are given a certain amount of time to come forward.
The court determines the validity of the will during probate, and if anyone wanted to contest the will, an argument could be presented.
Ultimately, if everything is in order, the executor will prepare the assets for distribution to the heirs. This can require appraisals and liquidation, and property is not typically going to sell overnight.
All in all, even if there are no particular complications, probate will take close to a year in most jurisdictions. Once the estate has been probated and closed by the court, the heirs can receive their inheritances.
The Revocable Trust
If you would prefer to facilitate more timely asset transfers after your passing, you could use a different legal device as the centerpiece of your estate plan. One popular device that is often used by people who want to avoid probate and the time consumption that goes along with it is the revocable living trust.
You do not have to be extraordinarily wealthy to create a living trust, and you do not lose control of the assets in the trust while you are living. If you create and fund a living trust, you can serve as the trustee throughout your life, and you can also act as the beneficiary.
In the trust declaration, you name a trustee to succeed you after you are gone, and you also name successor beneficiaries. You leave behind instructions with regard to the way the way you want the assets to be distributed. After your passing, the successor trustee would follow these instructions. Assets would be distributed to the beneficiaries in accordance with your wishes.
These distributions would not be subject to the probate process, so asset distributions could potentially begin shortly after your passing if there is adequate liquidity.
A revocable living trust can be a good choice if you want to avoid probate, but this is not the only benefit that you gain if you establish a revocable trust. With a will, you would be facilitating lump sum, direct inheritance distributions. Plus, if the inheritors are subject to legal judgments, the inheritances could be attached by creditors.
Things are different with a revocable living trust. You can include a spendthrift provision, and the trust would become irrevocable after you die, so there would be a layer of asset protection. To preserve the viability of the trust, you can allow for ongoing, incremental distributions to the beneficiaries over an extended period of time.
You can also empower a disability trustee to administer the trust if you ever become incapacitated.
Attend a Free Seminar
You should certainly educate yourself with regard to the value of revocable living trusts before you make any final estate planning decisions. If you would like to take the next step, attend one of our upcoming seminars. The seminars are free, and you can visit this page to obtain details and registration information: Naples, FL Estate Planning Seminars.