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If you die without a Will (intestate), your state’s laws will determine who receives your property by default. These laws vary from state to state, but typically the distribution would be to your spouse and children, or if none, to other family members.. A Will allows you to alter the state’s default plan to suit your personal preferences. 

A revocable living trust is a written document that determines how your assets will be handled after you die. Assets can include real estate, valuable possessions, bank accounts and investments.

Assets you place in the trust are then transferred to your designated beneficiaries upon your death. What sets a revocable living trust apart is that you can change or cancel the provisions at any time.

The person who creates a trust is the trust creator.  Typically, the trust creator of a revocable living trust is also the trustee. Your Living Trust  will also  name a successor trustee. This is the person who will manage the trust when you no longer can. The final term to know is beneficiaries. These are the people who will receive thee asset in your Trust assets after you die.

The main benefits of a Living Trust are listed below:

1. Revocable trusts are changeable and flexible.

Revocable living trusts allow you to make amendments at your own discretion. 

2. Revocable trusts avoid probate.

If you have a will when you die, your assets will go through probate. That is a court proceeding where your assets are distributed per your stipulations. Probate is a relatively slow process that that can take up to several months. If you own property in more than one state, your beneficiaries may have to go through multiple probates. The costs of going through probate can also cut down what your beneficiaries inherit. With revocable living trusts, probate is not necessary. Your successor trustee will be able to pass your assets on to your beneficiaries without the need to wait for a court order. That usually means a quicker and more affordable process for your beneficiaries.

3. Revocable trusts incur less cost and hassle down the line.

Drafting a living trust usually requires more funds and effort up front because it’s a more complex legal document than a regular trust or will. So that means you will need to spend some time and money to properly set up and maintain your trust. However, that work can save you the headache and higher expenses associated with probate. Living trusts also tend to hold up better if someone contests a provision, potentially saving more money and time.

4. Revocable trusts provide privacy.

After your death, wills and their requisite transactions enter into public record. Anyone can see what stipulations are in your will, who your beneficiaries are and what each beneficiary is inheriting. Estates in a living trust are distributed in private. No one can search the public records to see where your assets went. This protects the privacy of your assets as well as your beneficiaries.

The primary benefit of using Life Insurance as an estate planning tool is that the life insurance death benefit is payable on death and goes directly to the beneficiaries designated in your policy. Unlike a Will, life insurance death benefits are not required to go through probate. In NY, the average time for probate is 7-9 months. Therefore, Life Insurance policies can provide your beneficiaries with liquidity and quick access to the funds upon your death.

An irrevocable life insurance trust (ILIT) only holds life insurance policies. With an ILIT, you pay the premiums associated with the policies and the fees for administering the trust out of cash assets owned by the trust. When you die, the death benefit is paid to the ILIT and its proceeds distributed to the beneficiaries named in the trust.

You must make sufficient deposits to the trust’s cash-assets account to cover administration fees as well as policy premiums. For that reason, ILITs are typically only recommended if you are already considerably wealthy, and you are trying to avoid paying estate tax