There is often more than one road to the same destination. Sometimes, however, it may be more advantageous to take one road over the other. This is the case in estate planning, as St. Paul residents may have several tools at their disposal to accomplish certain goals, while one tool may be more effective for their personal circumstances.
Take the process of passing on property after death, for example. There are several different ways individuals can distribute their property to their heirs, starting with a basic will. However, for some, a will alone may not be the most effective way to distribute property. Wills must go through probate before the assets are distributed to beneficiaries, which can take time and money in the process.
A better approach for some might be to utilize a revocable trust. The trust acts like a will, in that individuals can specify how to distribute their assets, and they can place other conditions on the transfer of property as well.
The difference is that a trust avoids the probate process. This is because the trust takes effect once trust property is placed into it, and a trustee holds the property for the person's benefit. Thus, a person's assets must be re-titled in the trust's name. The trust is revocable because the person has the ability to make changes to it during their life.
Once the person dies, the trust becomes irrevocable. At that point, the trustee transfers the property, according to the directions of the deceased person. Accordingly, the property can be transferred through this process without going through probate court. Different states have different trust laws, however, so individuals should consult with an experienced attorney to determine whether a revocable trust is best for them, and what the requirements are where they live.
Source: TC Palm, "Estate planning is important, regardless of the size of your estate," Robert Schwartz, Jan. 8, 2014