A lot of people are under the impression that the process of estate planning revolves around drawing up a last will. While it is true that the last will is the most well known and commonly used vehicle of asset transfer in the field of estate planning it is not your only option and in many cases it is not the best one.
The primary reason why people often decide to go another route is because your estate must pass through the process of probate when you transfer your assets to your heirs with a last will. Probate is often avoided for a few different reasons. One of these is the fact that it is time consuming. Depending on the jurisdiction and the circumstances it can take anywhere from perhaps nine months to several years for the process to run its course, and the heirs to the estate do not receive their inheritances until the estate has been closed.
Probate also provides a forum for those who would choose to contest your wishes, and many people avoid it for this reason. And finally, probate can be expensive due to the court costs and the fees charged by the various professionals who must be involved in the administration of the estate.
One very widely used probate avoidance device is the revocable living trust. You create the trust and name your trustee and beneficiaries, but while you are alive you can retain full control of the assets in the trust. And since it is revocable, you can actually dissolve it or change the terms as you see fit. There are some costs involved in creating the revocable living trust, but in many cases you will save money in the long run and make the transfer of assets much more efficient when it is time for your loved ones to receive their inheritances.