Living Trusts vs. Wills: What’s the Difference?
If you are researching information on estate planning, you may have some questions about the difference between Living Trusts and Wills. How can you know which is the right one for your situation--a Will or a Living Trust? How does each address the passing of assets? There are advantages and disadvantages to both that you should know about in order to make a decision about the one you need.
We advise you to work with an estate planning attorney who can explain the differences and recommend the best solution. The Doyle Law Offices work with families in the process of estate planning to make the right choices for their situations. Contact us for more information and advice.
What is a Will?
A Will is a legal document that outlines your wishes regarding the distribution of your property and the care of any minor children. Wills can vary in their effectiveness, depending on the type. Failure to prepare a Will leaves decisions about your estate in the hands of judges or state officials that may not align with your wishes. You can prepare a valid Will yourself. Just be sure to have the document witnessed so as to avoid any challenges later. To be certain that everything is in order, consider seeing an attorney who specializes in estates.
- Doesn’t own property
- Goes through probate
- Doesn’t stipulate inheritance specifics
- Names beneficiaries
- Names guardians for minor children
What is a Living Trust?
A Living Trust is a legal document that is created during an individual’s lifetime where a designated person, called the trustee, is given responsibility for managing the individual’s assets that are owned by the Trust. The person (or entity) who creates the trust is the “grantor” or “settlor.” The trustee manages the assets for the benefit of the eventual beneficiary and holds legal possession of assets and property that go into the Trust. After creating a Trust, you must fund it by transferring assets to it.
There are two types of Trusts--Irrevocable and Revocable. With a Revocable Trust, the grantor can designate himself or herself as the trustee and take control of the assets that are in the Trust. With an Irrevocable Trust, the grantor gives up certain rights to control the assets in the Trust.
A Living Trust may be somewhat more complicated than a Will, but it can provide some great benefits. A Trust offers greater control over when and how your assets are distributed and can be customized to your individual situation. The biggest benefit, and the reason most people create a Living Trust, is to allow for easy transfer of the assets by minimizing or avoiding the sometimes complex and expensive legal process of probate.
A Living Trust:
- Owns property and assets
- Avoids probate
- Details stipulations on inheritance
- Allows customization by creating either irrevocable or revocable trusts
Which is Better?
It isn’t accurate to think of one--a Will or a Trust--as being “better” than the other because they are very different and accomplish the passing of assets differently. At The Doyle Law Offices, we advise clients to assess their specific needs and situation in the beginning of the process. Then you can find the solution that is best suited and that protects your family in the most appropriate way.
Can You Have Both a Will and a Living Trust?
You can have both a Will and a Living Trust. Remember, however, that they do two different things. Trusts provide for the management and distribution of your assets during your lifetime and after death. On the other hand, a Will allows you to do things like name guardians for your children, appoint an executor for your estate, and declare your wishes. But, there are different types of Wills that can accompany a Living Trust in order to have the most comprehensive estate plan.
For instance, let’s say you have a Will and a Living Trust, and there are assets included only in the Will. The assets included only in the Last Will more than likely will have to go through an extensive probate process. Additionally, it’s important to note that Last Wills are public documents. You may not want this. The solution is to create a Pour Over Will, which is a type of Will that is created to work in conjunction with the Living Trust. Using a Pour Over Will, the assets that you own outside of the Trust, as well as anything that is subject to your Last Will, will be paid to the Trust at the time of death.
Contact The Doyle Law Offices for Estate Planning
When you are planning for the way you want your estate to be handled upon death, you will need some professional advice to be sure everything is set up as you intend. Our experience can help. Contact The Doyle Law Offices, P.A. by calling (919) 228-4487 or by filling out the form below.