Personal Finance (Not Investing) • When/Why would you need Trust over Will

The will creates and funds the trusts.

Sounds reasonable.
Why not just create the trust now?

I get that probate might not be as big a deal as it's made out to be.
But, what the downside to avoiding it?

Even absent that, as afan pointed out above. the trust males it easier for someone to help the grantor in case of incapacitating.

I am still trying to understand the benefit of testamentary trusts vs RLT. I keep hearing "probate is not that big of a deal". But, that does not really make the testamentary trust approach better, does it?

In order for a revocable living trust to work, you need to preemptively title all assets to the trust, including every new account. In my experience (in California) this is a marginal additional amount of work, but it did take me ten years to get around to it with my brokerage account. The nice part about a will is that it can cover every asset now and in the future.

Your not going to want to keep the same trust for your children anyway, so you will be creating new trusts for them within the revocable living trust document. You haven't actually saved your children much work, as they will still need to go through the effort of creating new accounts or retitling assets within each of their trusts.

So to me the main benefit of the will approach is that you cannot miss an asset. Secondary benefit is a slightly easier time opening new accounts, buying and selling real estate, etc.

So, your take is that

1) re-titling accounts (done with a form at brokerage) is hard

but

2) Going through probate (filing with court, hiring lawyer, notices, etc) is easy.

interesting perspective. Not sure I agree with the assessment of level of difficulty. But, OK.

No, my take is that you are going to miss retitling an asset, resulting in having to probate your will anyway.

Statistics: Posted by jaMichael — Fri Mar 08, 2024 5:05 am — Replies 88 — Views 4592