Editor’s note: This post was originally published Aug. 29, 2023, and has been updated for accuracy, comprehensiveness and freshness on July 30, 2024.
Estate planning is a crucial step in ensuring that your assets are managed and distributed according to your wishes after you pass away. Two primary tools in this process are Living Trusts and Wills. Understanding the differences between these documents can be confusing, yet knowing the ins and outs is essential for effective estate planning. We’re here to help clarify key differences so that you can decide which option suits your unique situation best.
Trusts and Wills clearly spell out what is to pass to beneficiaries and responsibilities of legal guardians or executors of estates. But a Living Trust varies from a Will in a few important ways.
A Will is simple and straightforward. It provides instructions on how you wish to distribute assets to beneficiaries after your death.
LegalShield provider law firm Fiffik Law Group, PC, defines a Living Trust in this way: “Also known as a Living Trust, a revocable Trust can help assets pass outside of probate, yet allows you to retain control of the assets during your (the grantor’s) lifetime. It is flexible and can be dissolved at any time, should your circumstances or intentions change. A revocable Trust typically becomes irrevocable upon the death of the grantor.”
As the grantor or settlor of the Living Trust, you give a trustee the responsibility to hold and/or manage property on behalf of a beneficiary. You get to specify which assets your beneficiaries will receive, as well as when and how. Since a Trust sometimes avoids the probate process (depending on the situation), your heirs may be able to receive ownership of your property more quickly with a Living Trust than with a Will.
Since it is so important for a Living Trust to include accurate information, it is recommended to have a lawyer draft your Living Trust with you. This can cost a few thousand dollars, depending on the complexity of your estate and assets. A Will may cost less, but this will also depend on how lengthy and complicated it needs to be.
Living Trusts come with some myths that we need to debunk. Contrary to popular belief, Living Trusts are not just for wealthy people or only for the benefit of your heirs. A Living Trust can play a crucial role in managing your assets. A Living Trust generally supersedes a Will, but a Will may (in some instances) override a specific type of Trust. However, Wills and Trusts generally work together to accomplish the same goal that you have in mind.
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Estate Planning – July 2024
Estate Planning – July 2024
Estate Planning – April 2024
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