Living Trust Vs Will
Living Trust Vs Will is a common question that many ask when they are in the midst of preparing their wills. Both Living Trust and a Will are documents to give instructions how to handle your affairs when you pass on. The similarities end here. A living trust is like a vault, where you transfer assets in and have control over the assets, even if you are no longer around.
While most people know the purpose of a Will, many have the impression that a Living Trust is only for people who are wealthy. Although the wealthy do create Living Trust, it does not mean only the rich can do so. This is a common misconception. With inflation and dollar value of assets increasing, it is quite common for people to have asset touching 6 figures and this is where a living trust becomes practical.
The main difference between a Living Trust vs a Will is that assets held in a living trust do not go through the probate process. This avoids a potentially lengthy probate process that can take months or even years. Your surviving family members can transfer your property quickly and easily, which is not possible with a Will. More of the property you leave goes to the people you want to inherit it.
Other advantages of a Living Trust over a Will includes:-
- provision of a successor upon your death or incapacity without court intervention,
- prevents financial affairs from becoming a matter of public record
- allows a measure of control over your assets even after you are gone
- estate tax advantages
The disadvantages of a Living Trust compared to a Will:-
- more expensive to set up than a Will
- needs to be actively managed after it is created
- needs to be funded i.e. assets must be transferred into the trust
While you might be thinking of either to create a Living Trust or to write a Will, remember that a Living Trust don’t replace a Will. They compliment one another. Even if a substantial portion of your assets are held in the trust, you will still need a Will. The Will acts as back-up for property that you have not transferred to your living trust.
You can find out more about online wills if you want to write your Will online and about living trust.