The other week I wrote about my new take on revocable living trusts—basically, that in today’s world, privacy may be more valuable, and a revocable living trust can shelter the terms of your estate plan from people you do not want to have that information. In this article, I want to explain how a revocable living trust works, particularly how it shelters your intentions from others.

When a person dies, their assets pass in one of three ways: by contract, by operation of law, and as part of their probate estate. The classic example of property that passes by contract upon a person’s death is a life insurance policy that names a beneficiary. An example of property passing by operation of law upon a person’s death is a home owned jointly by a husband and wife; if the husband dies, the entire ownership of the home would pass to the wife automatically, by operation of law.

Probate property is all other property. So, for instance, if Mr. Smith dies with a bank account in his name alone that does not name a beneficiary, then that bank account would be probate property that his Will would control.

When Mr. Smith dies owning probate property and has a last will and testament, the person named as his executor must submit his Will to probate. The process of probate in New Jersey is exceedingly simple.

“To probate” a Will involves the nominated executor bringing the Will to the surrogate of the county in which the decedent lived. If Mr. Smith lived in Howell Township, then his executor would bring his Will to the Monmouth County Surrogate. The Surrogate is an elected official whose primary job is to admit Wills to probate.

Once the Will is submitted to probate, its terms become public record. Anyone can go see the probated Will of any person, and all of the terms in the Will are available for the public to see. If Mr. Smith disinherits a child, the public could see that. If Mr. Smith had stepchildren and did not leave any share of his estate to his stepchildren, then the stepchildren could see that fact.

So how does a revocable living trust work, and why does it keep the terms of the trust private? A revocable living trust is often called a Will substitute because, for all intents and purposes, it simply substitutes for a Will. When a person has a revocable trust, they also have a Will. The Will is called a “pour over Will” because the terms of the Will pour over all the probate assets of the decedent to the trust: Upon my death, my executor shall distribute all my assets to the Mr. Smith Revocable Living Trust.

The executor and the trustee are almost always the same people, so the “transfer” is really theoretical; the executor/trustee is simply using the terms of the trust to determine who will receive Mr. Smith’s estate.

When the executor probates Mr. Smith’s Will, he is filing a document that just says, “give everything to my trust.” The trust itself is never submitted for probate, so its terms—which spell out who actually gets what—stay unavailable to the public. That is why a revocable trust keeps the terms of your estate plan private.

For this reason, a revocable living trust is an excellent tool if you have reasons to keep your estate plan private. If Mr. Smith has four children and is leaving his estate to them equally, privacy may not be a primary issue for him.

For years, I thought that privacy after a person’s death wasn’t that important. As the internet becomes more embedded into our lives, I am beginning to believe that privacy can be a valuable commodity.