Planning for the distribution of your assets and the management of your affairs after your passing is an important aspect of estate planning. Two commonly used tools for achieving these goals are a will and a living trust. While both serve the purpose of distributing assets, they have distinct differences in terms of functionality, flexibility, and probate avoidance.
- Will: A will only takes effect after your passing, and it must go through the probate process, which is a court-supervised procedure to validate the will, pay debts, and distribute assets to beneficiaries. Probate can be time-consuming, costly, and subject to public record.
- Living Trust: A living trust, on the other hand, allows for the transfer of assets outside of probate. Assets placed in a living trust are typically distributed privately and efficiently, without court involvement. This can save time and money while maintaining privacy.
- Will: A lawyer, like an estate lawyer, can tell you that a will outlines your wishes regarding the distribution of assets upon your death, but it does not transfer property during your lifetime. Instead, it serves as an instruction manual for the distribution of assets after probate.
- Living Trust: A living trust allows you to transfer ownership of assets to the trust during your lifetime. As the trustee, you maintain control over the assets, and upon your passing, the successor trustee can distribute them to beneficiaries according to your instructions.
- Will: Wills become part of the public record during the probate process, which means the details of your assets, beneficiaries, and debts become accessible to the public, as lawyers from a law firm like W.B. Moore Law know.
- Living Trust: Living trusts are private documents. Since assets are distributed outside of probate, the details of your estate plan remain confidential.
- Will: Wills are often suitable for individuals with straightforward estates and asset distributions. They allow for the nomination of guardians for minor children and can be relatively simple to create.
- Living Trust: Living trusts offer greater flexibility, particularly for individuals with complex estates, multiple beneficiaries, or a desire for ongoing management of assets. They can include specific instructions for the management of assets in the event of your incapacity.
- Will: A will does not provide for incapacity planning. If you become incapacitated, a court may appoint a guardian or conservator to manage your affairs.
- Living Trust: A living trust can include provisions for the management of assets and your well-being in case of incapacity. This ensures a smooth transition of responsibilities without the need for court intervention.
Amendment And Revocation
- Will: Wills can be easily amended or revoked as long as you are mentally competent. Changes are typically made through a codicil, which is an addendum to the will.
- Living Trust: Living trusts are highly amendable and revocable during your lifetime. You can make changes or even dissolve the trust at any time.
Choose The Estate Plan That Works For You
The choice between a will and a living trust depends on your specific estate planning goals, the complexity of your estate, and your desire for privacy and probate avoidance. For help, contact trusted lawyers near you today.