Deciding what happens when you pass can be complicated and stressful; one decision is how you want your estate distributed. This means likely dealing with trusts and wills. Don’t leave this to your loved ones to figure out. Take the time now to understand the difference between a living trust vs a will, and make the decision that’s best for you and your family.

What Is a Living Trust?

A living trust is a legal document that outlines how you want your assets distributed after you die. You can name a trustee (including yourself) to manage the trust and beneficiaries who will receive your assets.

What is a Will?

A will is also a legal document that outlines how you want your assets distributed after you die. You name an executor to carry out your wishes, and beneficiaries who will receive your assets. These seem similar but there are major differences.

What’s the difference between a living trust and a will?

A living trust is created and can be executed during your lifetime, while a will only goes into effect after you die. With a living trust, you can specify exactly how and when you want your assets to be distributed.

Wills alone likely require going through probate court. Trusts are private documents that avoid probate but are more expensive to set up and manage initially. Probate is the legal process of settling your estate and can be expensive and time-consuming. If you have a living trust, your assets can be distributed without going through probate. Your successor trustee simply follows the instructions in the trust document.

If you have a will, your executor must file it with the probate court. The court then supervises the distribution of your assets according to your wishes. This process can be drawn out which is why it can be so costly.

Another major difference is that trusts are revocable, meaning you can change them at any time during your lifetime. You can also name yourself the trustee, which gives you complete control over your assets while you’re alive. Wills are not revocable, and you cannot name yourself as the executor.

So, what’s more appropriate — a living trust or a will? It depends on your personal circumstances. If you want to avoid probate, have more control over your assets, and be able to change your mind about your distribution wishes, then a living trust is probably better. If probate isn’t an issue and you’re fine with not being able to change your will, then a will may be the better option.

Estate planning decision are important so starting early and learning the various options available allow for your wishes to be carried out appropriately in the most efficient manner.

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