Do you know the difference between a will and a living trust? When thinking about estate planning, there are many different kinds of estate planning documents to consider and it is important to understand the difference between a will and a living trust before deciding which one is right for you and your family.
Estate planning is important for everyone, especially individuals who own property and other assets that are valuable or important to keep in the family. A will or living trust can help legally document what will happen to those assets and possessions and make sure your wishes are known.
A will and a living trust are both documents that can be created in an estate plan to notify your family and the government about what should happen to your assets and possessions. How are wills and living trusts different?
A will is a document that explains how a person’s estate will be distributed after their death. A living trust is a document that allows a person to appoint someone to be responsible for transferring their assets to the trust while they are still alive. A living trust works by having the trustor or person who created the trust appoint a trustee who will be responsible for transferring assets to the beneficiaries of the trust.
When deciding which option is better, it is important to know that a will is required to go through probate and a living trust is not. Probate is the process that transfers property after a person dies and it usually involves a court hearing arguments if anyone contests the will.
Another difference to consider is that assets will not be distributed until after your death in a will while assets in a living trust are only distributed while you are alive. Not everyone benefits from having a living trust but they can be very helpful for parents with minor children.
Individuals should understand the differences between a will and living trust and decide which is best for them. People can also have both documents in their estate plan or decide on neither. However, it is best to have at least a will to help your family avoid costly and timely disputes after you pass away.
Source: FindLaw, ” Will or Living Trust: What’s the Difference? ” Betty Wang, July 29, 2013