Both a Last Will & Testament and a Revocable Trust (sometimes called a "Living Trust") are testamentary documents. That means they state your wishes and instructions for distributing your inheritance after you pass away. Both also allow you to appoint someone of your choosing to be in charge of settling your estate. However, this is where the similarities end.
A Will is generally simpler (and cheaper) to prepare than a Trust. This is because a Will is limited in terms of what it has the power to do and how much control you can have over your estate after you are gone. Generally speaking, the Will can state who your heirs will be and how much each of them will receive. Not much can be done beyond that. As long as your heirs are at least 18 years old, there is little to no ability to delay distributions until they are more mature. You also cannot protect your heirs and their inheritance from any issues they might be facing, such as creditor issues, problems managing money, immaturity, substance abuse, or a spouse who cannot wait to get his or her hands on your child's inheritance. As long as the beneficiaries are legal adults, once the probate process is complete, your Executor will hand them a check for the full amount of their inheritance. That's it!
A Trust can be an amazing tool in the right circumstances. I often refer to it as the "Swiss Army Knife" of estate planning. It can provide enormous flexibility, control, and protection for your heirs after you pass away. You not only have the ability to decide who receives how much of an inheritance, but you can take it much further. You can put additional conditions or parameters around someone receiving an inheritance, such as a minimum age, requirements of graduation from college, protecting the inheritance from your beneficiary's spouse, or appointing someone else (known as a "Trustee") to manage the inheritance and make money decisions on behalf of your beneficiary.
If you or someone you know is confused about what is the best way to protect your life savings and your family after you pass away, please give my team at The Rosenbauer Law Office a call today at 513-463-6789. We are standing by to help answer any questions you may have.