When you begin planning your estate, you’ll likely come across the terms “will” and “living trust.” These estate planning options serve substantially different needs. While almost everyone has heard of a will, fewer people have heard of living trusts. Learn more about the differences between wills and living trusts to figure out which one best meets your needs.
How Courts View Wills and Living Trusts
The court takes two separate approaches to wills and trusts, and this difference alone could help you decide which option suits you. A will is a legal document that simply lists your instructions and who you wish to serve as executor after you pass. With only a will, the executor cannot distribute property. The will must go through probate, during which the court validates your will and verifies that it is the only will you’ve left.
A living trust is a legal entity set up before you pass. Ownership of your assets is passed to the trust and a trustee can manage your assets as soon as you die or become incapacitated. Most trusts do not go through the probate process. They are put into the care of the successor trustee and you rarely need further court involvement.
One of the key benefits of a living trust is how it allows you to decide exactly how you want your assets to be used after you pass away or become incapacitated. Consider, for example, someone who has adult children. If they want to distribute one-third of their estate to each child, they can decide how they want their children to receive their money. If one child is notoriously bad with money, the individual can allow the child to receive one-third at age 25, one-third at age 35, and one-third at age 40. This is an attractive feature for those who worry about a lifetime of hard work being squandered in a few years by beneficiaries.
Saving Time and Money
In many cases, a living trust saves time and money when compared to a will. You may find that it costs more up front to set up a living trust. Rather than simply drafting and notarizing a document, you have to set up a trust and transfer property into it. However, the scales tip after you pass away or become incapacitated. With a will, your beneficiaries could spend a considerable amount of time and money defending your last wishes and waiting for your will to go through probate. With a living trust, your successor trustee can immediately step into their role and manage your estate.
The time to hire an estate planning attorney is now. Having your affairs in order before an emergency arises can save time, money, and stress. With over 40 years of experience, Werner Law Firm can help you accomplish your estate planning goals. Call us at 1-866-265-4467 to set up a consultation.