The Difference Between Living Trust And Will . Which One Is Best?
What are the Differences between a Will and a Trust?
Planning for the future is essential, and two key tools often come into play: Wills and Trusts. Both serve to distribute your assets and provide for your loved ones, but they function very differently, especially when it comes to probate.
Understanding these differences is crucial for making the best choice for your unique situation. This page will compare and contrast Wills and Trusts, highlighting why a Trust is often the superior choice for avoiding probate and its associated costs.
Will:
A Will is a legal document that outlines how you want your assets distributed after your death. It names beneficiaries, designates guardians for minor children, and appoints an executor to manage your estate. While a Will is a fundamental part of estate planning, it has one major drawback: it must go through probate.
Here are some features of a Will:
- Probate is required
- Distribution of assets must wait for probate to finish
- Public record
- Limited control after death
Trust:
A Trust is a legal arrangement where you (the grantor) transfer assets to a trustee, who manages them for the benefit of your chosen beneficiaries.
Trusts can be created during your lifetime (living trusts) or upon your death (testamentary trusts). The key advantage of a living trust is that it avoids probate.
Features of a Trust:
- Probate is avoided completely
- Distribution of assets instantly upon death
- Private (not a public record like a Will)
- Greater control over property after death
- More complex to create; therefore more expensive to set up
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