Question: What is the difference between a living trust and a will?

Answer: A revocable living trust is a legal document that controls the distribution of your assets upon your death. You transfer ownership of assets such as real estate and bank accounts to your trust for your benefit during your lifetime. Upon your incapacity or death, your named successor trustee assumes management and administration of your trust for the benefit of you or your designated beneficiaries.

In Hawaii the primary benefit of the revocable living trust is to avoid probate court, though there are many other benefits such as avoiding a guardianship or conservatorship proceeding in the event of your incapacity, and protecting untrustworthy or juvenile beneficiaries upon your death.

A last will and testament, by contrast, is a legal document that, while created during your lifetime, does not take effect until your death. Just as with a trust, you name a personal representative who will administer your estate, and beneficiaries who will receive your assets. Unlike a revocable living trust, a will must be probated in probate court in order to prove its validity before distribution of assets.

For individuals who do not own real estate, have modest estates of less than $100,000 and do not have minor children, a last will may sufficiently cover the disposition of their assets upon death.

Q: What does probate mean?

A: When an individual dies without a proper estate plan, a probate is often necessary to deal with the assets left behind. Probate is a legal process initiated upon death whereby interested parties ask the court to determine the beneficiaries of one’s estate.

Probate is required in all instances in which a person dies owning more than $100,000 in personal property, in their sole name, without a designated beneficiary. It is also required when a person dies owning real estate in their individual capacity. Probate is expensive, time-consuming and open to the public. People who have been through a probate for a friend or family member are more apt to set up their own revocable living trust to avoid leaving the same burden on their loved ones.

Q: At what age should a person consider getting a living trust?

A: Perhaps the best gauge for determining when one should consider creating a living trust is the nature and type of one’s assets, rather than their age. If you own real property or assets in excess of $100,000 in your individual name, or have minor children, you should have a trust.

Q: When should a living trust be updated?

A: It is recommended that your trust be reviewed by you and your attorney every four to five years to address changes in the law and changes in your life. Just as with a car, regular maintenance and checkups are recommended. New features and protections are offered that may not have existed when your trust was executed. Without a regular review, you may not be aware of the outdated provisions in your trust documents. One benefit of a revocable living trust is that you are free to amend your trustees and beneficiaries as you see fit.

Q: How do I ensure my estate is in proper order so that my loved ones will be able to administer my estate without any problems?

A: For most people, dealing with a loved one’s estate upon their passing is an enormous responsibility that is only compounded by stress of the loss. Among the many concerns that should be addressed while you are alive and capable are setting up your will or trust; arranging for your funeral, burial or cremation; listing friends and family members who should be notified upon your death; and organizing your financial statements, life insurance policies and retirement account information.

If you are a veteran, store your DD Form 214 discharge papers in an accessible place so that your family members may take advantage of benefits available to you. Your trustee or personal representative will be tasked with securing your property, notifying Social Security of your death, ordering copies of your death certificate and ensuring the preparation of your last tax return, among many other tasks.

Interviewed by Star-Advertiser reporter Kathryn Mykleseth