A Will is utilized to direct how assets are to be distributed upon your death, after the payment of all proper claims against your estate. The Will only has an effect on assets that are not otherwise set up with beneficiary designations or that are held jointly with another person. A Will has no effect until it is admitted to probate and the personal representative or executor named in the Will is appointed by the court and granted authority by the court to handle all necessary matters to collect and disburse assets. There are some simplified forms of probate where the number of assets going through probate is under certain limits, but if there are assets listed solely in the name of a decedent, some form of probate will be required.
A Revocable Living Trust is frequently used to avoid probate, although there may be other ways to avoid probate without setting up a Trust. For a Trust to be effective, all assets must be transferred or re-registered in the name of the Trust.
Instead of owning bank accounts or investments and real estate in your name individually, those assets are owned by the trust, and you are managing the Trust as a trustee. Upon the death of the initial trustee, who is generally the grantor that set up the trust, a successor trustee is named to take over immediately, paying all proper bills and making a distribution to the beneficiaries.
Trusts are also very beneficial for taking care of a spouse with Alzheimer’s or some other debilitating illness, or for taking care of disabled children without causing a loss of governmental benefits.