5 Key Differences May Help You Decide What You Need
Planning for the future requires you to make several decisions now—including whether a will or living trust is right for your estate plan. Read about the key differences between these important documents, and then contact an estate planning attorney to determine the best option for you.
Here’s How These Documents Differ:
1. Asset Transfer and Management
Will: You keep your assets titled in your name during your lifetime. A will provides an outline of how you would like your assets distributed when you die. A will does not help manage your affairs should you become incapacitated.
Living trust: You transfer the title to your assets to the trust during your lifetime and the trustee manages them. Most people who create a living trust name themselves as trustee, so you can still use and control your assets, but they are technically owned by the trust. You designate a successor who will manage assets should you become incapacitated or upon your death.
Probate is the legal process that transfers an estate to beneficiaries upon your death—even with a will. The process can be costly, time consuming and often delays the transfer of assets. A living trust does not require probate, so beneficiaries usually receive their shares more quickly.
When a will is submitted to probate, it becomes a matter of public record. Anyone can access your will and see the contents of your estate and to whom you left them. A trust does not go through probate, keeping your estate private.
4. Out-of-State Real Estate
If you own real estate in multiple states, you should consider setting up a living trust. Otherwise, an additional probate proceeding may be necessary in the state where the real estate is located.
A trust usually costs a little more to create and is more time consuming to set up. A trust is a separate document that needs to be drafted by an attorney. Once created, you transfer assets to the trust. After your lifetime, the assets held in trust are not subject to probate expenses. With a will, assets held in your individual name are subject to probate, which usually costs more than setting up a trust.
An Easy Decision You Can Make Today
Whether you choose a will or revocable living trust, decide to create your legacy. With the help of an experienced attorney, Estate Planning can be a surprisingly simple process that makes a meaningful impact.
The information in this newsletter is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor.