III Abstract- Accountants must help taxpayers decide whether to use revocable living trusts or wills for estate planning. The advantages of revocable living trusts include the elimination of probate expenses, the provision of asset management help by co-trustees or successor trustees, increased confidentiality of financial records, and faster distribution of assets to beneficiaries. The use of a will and probate estate may be beneficial when individuals have a large amount of federal taxable income that will continue to be generated after their death, or when individuals' willed contributions to charitable organizations are expected to generate income after their death and before the distribution of the assets. CPA financial planners frequently receive telephone calls from clients who say that their friends and neighbors have suggested that a revocable trust, prepared during the testator's lifetime, has substantial advantages over the use of wills in estate planning. The clients have been told that trust assets escape probate costs and can be managed during the testator's lifetime and after death in accordance with the client's wishes.
Estate planning is particularly important under our restructured tax laws.
Estate planning frequently is more important than income tax planning because of the large dollar amounts involved, not that income tax planning should be overlooked. The question of revocable living trusts compared with wills as estate planning devices must be decided on a case by case basis. Both approaches have their place as can be seen upon careful examination. A revocable living trust provides for management of trust assets while the individual is living and provides for the disposition of the assets upon the individual's death, at which point the revocable living trust operates essentially the same as would a will. The use of a revocable living trust generally entails the preparation of two separate documents, as opposed to one document, when only a will is used.