1. both pass along specific assets,

2.  both name guardians,

3. both are written,signed and witnessed;

4.  both can be amended and revoked.

The differences between both are what sets them apart:

A Last Will and Testament, appoints an Executor who then takes the original Last Will and Testament to the Probate Court after the person dies. The assets are then collected and distributed according to the directions in the Last Will and Testament.  There are North Carolina Probate Court rules and regulations that need to be followed by the Executor once he or she has been appointed.  During the lifetime of the person who created the Last Will and Testament, the title of assets are not changed.  However, the names of beneficiaries may need to be changed to keep everything consistent with the Last Will and Testament.

A Revocable Living Trust appoints a Trustee and a Successor Trustee. This person manages the assets in the trust after death.  If done properly, a Revocable Living Trust will avoid probate. How?  Because the title of assets (not all) will be changed to the name of the Trust.  This is called Funding the Trust.  If the asset is not in the name of the person who died, then there is nothing to probate.  Ultimately, avoiding Probate.

I must caution you that there are certain assets that should not be titled into the name of the trust and there are beneficiary designations that must be changed in order for the Revocable Living Trust plan to work.  You should consult with an attorney, a financial planner and a CPA prior to making any changes – if you don’t you will run the risk of unwanted tax liabilities.

“What is the Difference Between a Last Will and Testament

and  a Revocable Living Trust?”

1. Where are the assets located?  All with one institution or several?

2.  How much time does the appointed Executor or Administrator have to dedicated to collecting the assets?  His or her time may be limited due to his or her own personal responsibilities.

3.  Do we need to locate beneficiaries or heirs?

4.  How quickly does the financial institution provide the information requested?

5.  What is the size of the estate?

6.  The requirements pertaining to filing deadlines, notice requirements, etc. of the Probate Court are always factors to consider as well.

If your goal is to avoiding Probate, have a  smoother and quicker transition of assets then an alternate planning option for you to consider is a  Revocable Living Trust.

Below is a list of the 10 most popular questions I have received from clients.

1. How do you qualify as an Executor?

2. Can you decline your right to qualify as an Executor if you were appointed?

3. Who cannot qualify even if you have been appointed as an Executor?

4. What happens if the named Executor dies or if the appointed Executor dies?

5. What is the time frame to apply to become appointed as the Executor?

6. Where does a potential executor apply for the appointment? What County? What office?

7. What does the potential executor have to include in the initial Application to the Clerk?

8. What are the filing fees to obtain the appointment?

9. Does the Executor have to notify the potential beneficiaries or does the Clerk?

10. How long is the Executor’s appointed for?

It is always best to consult with an attorney whether you are ready to create your Estate Plan or if you have been appointed. It is pointless to appoint someone that may not be permitted to act or may not want to act for various reasons. It is better to be aware of it now so that there are little to no appointment issues later.

1. Complete all documentation necessary to become the personal representative (Petition for Letters and Oath at a minimum)

2. Gather information on the decedent and the decedent’s probate assets (this is required for the Petition)

3. Make an appointment with the probate clerk (not always necessary)

4. Meet with the probate clerk (again, not always necessary)

5. Inventory Safe Deposit boxes (You may need a Court Order to open this if you are trying to do it before the Letters are issued by the Clerk)

6. Gather and protect estate property

7. retain experts (CPA’s, Attorneys, Financial Planners, for example)

8. determine value of non-probate assets (probably won’t get far with this until you have the Letters issued from the Clerk)

9. investigate potential wrongful death claims (you will have to disclose whether there is a wrongful death claim)

10. obtain tax identification number (you will need this before you open an Estate Account)

11. open estate bank account (using the tax identification number as the “social security number” so to speak of the Estate Account)

12. pay the year’s allowance (if the surviving spouse requires it)

13. activate or terminate government benefits

14. obtain prior tax returns

15. obtain death certificates (the funeral home usually orders these for the family when they burial arrangements are made. I would order at least 10)

16. publish notice to creditors (cannot do this until the Letters have been issued by the Clerk)

17. identify legal obligations of the decedent (creditors, etc.)

18. start going through decedent’s personal effects to determine where assets may be held and or any liabilities he or she has outstanding

19. keep very detailed records on any checks deposited into the Estate Account as well as any checks written from the account

20. Call an attorney if you get too overwhelmed with the process!

The one page document contains the following information:

1.  The State and County the Estate was filed;

2.  The name of the Decedent (person who died);

3.  A statement that the application has been reviewed and the Court “adjudged legally sufficient the qualification of the fiduciary (Executor)”;

4.  The name of the Executor ;

5.  The date of the appointment (the date that the Clerk of Court signed the Letter);

6.  The raised seal of the Court

Once this Letter is issued, it will need to be provided to whatever institution the Executor will need in order to collect the assets.  It also needs to be provided if the the Executor needs to obtain information on an account or other asset.

In North Carolina, the Court provides five (5) Letters Testamentary which is included in the filing fee of $88.00.  If the Executor needs additional ones then they are $1.00 each.  For a list of additional Court fees please see http://tinyurl.com/probatefees.

Keep in mind that unless the Court is satisfied with the initial filing documents, the Letters will not be issued.

Michael, as Terri’s guardian, had entered a do not resuscitate order for her but was convinced by the nursing home staff to have it rescinded; in 1998 he petitioned the Sixth Circuit Court of Florida to remove her feeding tube. He was opposed by Terri’s parents, Robert and Mary Schindler, who argued that Terri was conscious. Michael later transferred his authority over the matter to the court, which determined that Terri would not wish to continue life-prolonging measures.

The local court’s decision to disconnect Schiavo from life support was carried out on March 18, 2005, and Schiavo died of effects of dehydration at a Pinellas Park hospice on March 31.

This case stands as the representative example of why having an advanced medical directive plan in place is so essential. Regardless of what beliefs you may have regarding the final outcome of the case, the lesson to be learned from this tragedy is that the only way to prevent such a situation is to plan. The only way to prevent a court from interceding in such a decision, is to have a documented plan in place.

Unfortunately, human nature compels us to wait until it is too late to put such a plan in place. “That can’t happen to me”, syndrome runs rampant. When coupled with the belief that, “talking with an attorney about these issues is just too expensive”, a perfect storm is created that leads to many people into tragic situations like Terri Schiavo’s.

The truth is that with some basic planning, these types of tragedies can be avoided. Furthermore, putting advanced medical directives in place doesn’t have to be cost prohibitive. Many of my clients are surprised to learn just how easy and affordable setting up some basic health care directives can be. I am happy to discuss your specific situation with you by phone.

You can find IRS Form SS-4 at the IRS Website.  The form can be completed on the internet by either the Executor or the Attorney representing the Estate.  However, if the Attorney is the person doing it, he or she must have a Power of Attorney given by the Executor to obtain the number on behalf of the Executor.