Planning for the end of life is a natural thing that most people begin to think about when their kids are no longer kids. Even though the process itself does not take very long, there is a great deal of research that needs to be done beforehand to ensure you are setting up the right documentation for your personal assets and circumstances.
This article provides information on two different legal documents that are often used interchangeably but mean very different things: wills and trusts. We encourage you to review this information and contact us if you are still unsure which one is best for your circumstances.
Will vs. Living Trust: What is the Difference?
Wills and living trusts are both estate planning documents used to pass assets on to beneficiaries at death. However, there are distinct differences between the two. Nolo, a library of consumer-friendly legal information, has put together an overview chart that clearly depicts the differences between the two. A living trust helps you avoid probate. You can’t use a living trust to name an executor or guardians for your children. You need a will to do those things.
Benefits of Having a Living Trust
The main benefit of having a living trust is that it is private, unlike a will which becomes a matter of public record. This can be beneficial if there are family or individuals you would rather not have a full accounting of your property upon death. Also, this can avoid family disputes that may happen after a death when there is arguing over inheritance or if individuals make claims to certain properties and assets. Another benefit of setting up a living trust is that it can help avoid probate and protects you from court challenges and conservatorship.
Benefits of a Will
Compared to living trusts, wills are considerably less time-consuming to establish, involve less ongoing maintenance, and are not as difficult to modify. Also, if you decide to choose to create a living trust, you’ll still need a simple will, as a back-up device. Simply put – you’ll be setting up a will no matter what to protect your property. If you have younger children, you will need a will because the document allows you to name guardians for your children.
Deciding the Right Choice For You
Most people need a will, but not everyone needs a living trust. Whether or not you need a living trust depends on your age, how wealthy you are, and whether you’re married.
If you have questions or would like to discuss your situation, please contact us.