You’ve worked hard for your money and property over your lifetime, and you want to be sure it’s in good hands after your death. To guarantee this, you may want to create a living trust or a will—or both. Learn more about the differences and how to choose below.
WHAT IS A LIVING TRUST?
In short, a trust is a legal document that lists exactly what you want done with your property when you die or become incapacitated. A living trust is a trust that can be set up at any time, changed at any time, and revoked at any time (which is why it’s also known as a revocable trust). A living trust will include the name of a trustee, who is the person responsible for managing any property in the trust.
WHAT IS A WILL?
A last will and testament, or a will, is a legal document that lists instructions about your property after your death. Your will may include a list of beneficiaries—or who will be getting your property. It may include an executor, or someone who is legally responsible for dividing up and managing your property, bills, taxes, and other arrangements after your death. Just like a trust, a will can be changed and is revocable at any time.
Which One Do You Need?
Because living trusts and wills are so similar in nature, we get a lot of questions about these two documents. You may be wondering:
- What are the differences between a living trust and a will?
- Is one document better than the other?
- Do I need a living trust and a will?
To help you better understand trust law and wills, here’s a more in-depth look at the differences between trusts and wills, as well as how to choose the right one.
What are the differences between a living trust and a will?
A living trust requires more money and effort up front and requires more maintenance over time. Trust law can be more rigid than the laws regarding wills because more specifications are needed. When drafting a will, the only legal requirements are that you are “of sound mind” and that you and two witnesses sign the document.
The biggest different between a living trust and a will has to do with when each can be administered. A will is only useful in the event of your death, whereas a living trust can be useful if you become ill, injured, or incapacitated in another way.
Is one document better than the other?
The answer to this can vary, as this depends on your individual situation. Both a living trust and a will allow you to choose a guardian for your minor children. And both can be edited throughout your lifetime as necessary.
A living trust does have two big advantages over a will for many people:
- You have more control over when your beneficiaries get access to funds, what’s done with your assets, and how they’re used.
- Your trustee can take over without the court getting involved if you become sick or incapacitated.
Do I need a living trust and a will?
The answer depends on your needs and your family’s future needs. If you have a large estate, a trust may be in your best interest. As long as all of your assets are tied to the trust, you don’t have much need for a will. Although, a will can serve as a backup plan for your trust. If your estate is not as large and you have no need to control when/where/how your beneficiaries get their assets, a will may be all you need.
For more advice on trust law, assistance creating a will or trust, or help with trust administration, contact us at Bochnewich Law Offices. Click below for more information on trust law and estate litigation.