Will Vs. Living Trust: Comparison

•    With a living trust, you can choose beneficiaries and select a trustee to oversee the management and distribution of trust funds after a demise. As a result, it enables your family to avoid having to go through the probate process for any assets distributed by the trust and other issues pertaining to your estate.

 

•    Some people create living trusts just to escape probate. They can, however, be more time- and money-consuming to draught than a will. They also demand a notary public.

 

•    A living trust is unable to appoint guardians for minor children or name an executor for a will. As a result, those who have living trusts also typically create a will. When you create and sign a living trust, it goes into effect right away and gives you lifetime control over, the management of, and protection of your assets. 

 

•    Additionally, it means that this control will continue after the death to determine how the assets are distributed to your beneficiaries in accordance with the living trust document's instructions.

 

•    A will is a legally binding document that appoints an executor to carry out your final desires. It specifies how the executor is to distribute your assets. In addition to naming guardians for minor children, it also contains instructions for other tasks like tax and debt repayment, debt forgiveness, and funeral arrangements. 

 

•    The court-managed probate procedure is used to manage a will, including the division of assets. It is well known that probate may be quite a time-consuming and costly. Additionally, once a probate court is involved, information about a will becomes public.

 

•    A will is less expensive to create than a living trust because it is a simpler legal document to do so. Your signature must be witnessed, but there is no notary public involved. Upon death or incapacitation, it takes effect.

 

Typically, it's a good idea to work with an estate lawyer to create a living will. Here is a rough outline of the procedures you will follow to make one, though. 

 

1.    Choose if you require a revocable or irrevocable living trust.

 

2.    With the assets you've chosen for the trust, fund it.

 

3.    Choose your beneficiaries and the percentages of distribution.

 

4.    Choose a trustee who will manage your living trust after your passing.

 

5.    Fill out the living trust form completely, have your estate lawyer evaluate it, and sign it in front of a notary public (a role your estate lawyer may also play).

 

6.    Store the original living trust document securely, preferably in a safe at your bank (check the contents periodically). 

 

7.    Most likely, your estate attorney has a copy. Inform your trustee of where it is and how to get to it if necessary. 

 

No. A living will is a directive that a person leaves to a trusted third party in the event that they become incompetent or lose their ability to communicate, giving them power of attorney and other powers. A living (or intervivos) trust creates a legal entity (the trust), which maintains assets that can be given to beneficiaries after one's death without going through the probate process. 

 

A lawyer is typically needed to create a living trust. A revocable living trust may cost up to several thousand dollars, depending on their rate. An irrevocable trust could cost extra since it's more complicated. These prices will differ by area and between law firms. 

 

In addition to being expensive, trusts can have drawbacks depending on whether they are revocable or irrevocable, each of which has advantages and disadvantages. The inability of a revocable trust to shield assets while a person is still alive from tax authorities or creditors restricts its use. An irrevocable trust has extremely little flexibility in how it can be managed after it is established and includes giving up all ownership and control of the assets placed inside of it.

 

For those who have assets they want to manage and safeguard for the rest of their lives, a living trust can be a crucial legal arrangement. It often gives persons who create and fund them, known as grantors, the authority to control and profit from their assets while they are alive and to determine how those assets should be dispersed after their death. 

 

Living trusts typically promote the efficient transfer of assets to beneficiaries and avoid the time-consuming, expensive probate process.