Living Trust OR A Last Will? Which Is The Right One For You?
Last Will or Living Trust?
What is a Living Trust?
A Living Trust (or Revocable Trust) is a written legal document through which your assets are placed into a trust for your benefit during your lifetime and then transferred to designated beneficiaries at your death by your chosen representative, called a “successor trustee”.
What is a Last Will & Testament?
A Will is a written legal document with a plan of distribution of your assets upon your death. Your executor, as named in the will, oversees this process, and notably, nothing in your will takes effect till after you die.
So why choose a “Living Trust”?
1. You can avoid time and expense associated with probate (while the estate’s assets are in probate, they may be frozen — a living trust avoids this).
2. You can minimize tax consequences thereby saving you money.
3. A trust is more private.
4. Specifically toward those individuals who have a complex estate plan including: generation-skipping, conditions to beneficiaries, beneficiaries with special needs or receiving government assistance; a living trust is much more suited to your needs.
5. Your trustee can automatically jump into the driver’s seat if you become ill or incapacitated. (If you simply have a will without a durable power of attorney, the court will appoint someone to oversee your financial affairs who will have to report to the court for approval of expenses, sales of property, etc.
6. With a living trust, your handpicked successor trustee can manage your affairs without court Intervention, and since the trust is revocable, if you dispute your incapacity, you can retain control yourself.
Why choose a Last Will & Testament?
1. A Will is less expensive. A living trust is more expensive to set up than a typical Will because it must be actively managed after it is created.
2. A Will does not need continual funding. A Living Trust is useless unless you continually fund it. If you die before certain assets are transferred, then those belongings will not be included.
3. A Will does not need continual management of your estate. If you are not planning on making continual adjustments and additions then a Will may be the best thing for you.
If you or someone you love has more questions concerning drafting up and putting in place a Living Trust or a Last Will & Testament, we are here to help. Call us for a free consultation and we will get you started right away and help you know which one is right for you.
The future is unknown. Don’t delay.