If you have done any research about estate planning, you may have questions about the differences between a will and a living trust. A will is a document that describes your wishes for your assets and certain other matters after you pass away. In this way, a living trust is similar, but there are some large differences.
Do You Need A Living Trust?
First, it will help to understand some basics of a living trust and how it differs from a will. You place your assets into a revocable living trust while you are still alive. You act as the trustee, and if you’re married, your spouse might be a co-trustee.
You also appoint successor trustees to manage the trust after you pass away or become incapacitated. Because you made a revocable trust, you’re completely free to change the trust at any time.
Advantages Of A Living Trust
This illustrates one big difference between a trust and a will. A will specifies what happens after you pass away, but a successor trustee can take over the trust while you are still alive and incapacitated. This offers you and your estate an extra layer of protection.
There are also a couple of other advantages of establishing a living trust:
* Avoid courts: Wills may have to go through courts and probate, but trusts don’t. This can save your heirs time and trouble when they need to split and manage your estate.
* Privacy: Wills are public documents, but trusts are kept private. If you don’t want the public to learn about your assets, even after you pass away, you might consider a living trust.
Disadvantages Of A Living Trust
The first disadvantage is that the living trust will cost more to create. You might need a lawyer to help you with a will or living trust, but typically, a living trust costs more to create.
Also, you might still require a will to specify other matters that aren’t included in the trust, such as the person responsible for taking care of other people who require custodial care.
Finally, you must fund the trust with assets. You can still move these assets in and out of the trust, and while you are alive, it is entirely for your benefit. You might also create something that is called a pour-over will. This simply states that any assets that aren’t in the trust will automatically be includes after you pass away.
Do You Need A Living Trust?
If you have a larger, complex estate, a living trust may help with estate planning. This kind of trusts costs somewhat more to create than a will, but it also can do more. For some people, the extra expense can help save money or stress later on.
It can help protect privacy, help heirs avoid probate, and also provide some benefits while you are still alive. You might speak with an attorney who has experience in estate planning to get good advice for your unique situation.