Most people want to be preparedfor a rainy day. Therefore, many of them ask this question: shall I have living trust or a will? Both these documents are used for similar purposes- that is,
disbursing property after someone’s demise- but come with each its own merits
and demerits.
This article explores the distinctionbetween a living trust and a will and suggests which option should be chosen by you.
Living Trustvs Will: Key Differences
A living trust is a legaldocument whereby one can deposit property in trust when still alive. These
assets are, however, vested in the trust, which will manage them for your benefit during your lifetime and, on your demise, distribute them to your beneficiaries. On the other hand, a will is a legal document specifying your wishes regarding the distribution of your property upon your demise. Your
assets will be distributed as per your instruction under the court’s supervision.
In addition, a living trustenables one to bypass the probation process. It is a court-supervised process that comes when one passes away. The court examines the will, discharges the debts owed by the decedent’s property, and distributes the assets per the stated direction in the will. The process is often expensive and consumes much time because your resources may remain tied up for months or years. In contrast, a living trust enables you to distribute assets upon your death,
hence allowing bypassing of the probate process.
It also offers control over yourproperty. You can distribute your assets as per your wish, but it depends upon the final order of the court. You can determine how and when your assets will be passed on through the use of a living trust. You can do something like creating a trust that ensures your kids’ tuition is paid after your demise or divide your estate among multiple beneficiaries in installments instead of one go.
Drawbacksof A Living Trust
This notwithstanding, there exists a couple of drawbacks to livingtrusts.
Firstly, itcan be a very expensive one. A living trust may turn out to be more costly than writing a will. In order to set up a living trust, you must hire a professional and instruct them to draw up a written agreement detailing all assets that should be transferred into the trust. Remember that a change in the assets would mean another update of the said trust.
Anotherundesirable aspect of a living trust is that it may be very complex as compared to a will. During your lifetime, you will have to manage the trust, which involves noting down all the assets in the trust and ensuring their proper management. It may entail a lot of paperwork.
In contrast,a will has much less complexity, which makes it cheaper to produce. This includes keeping a chronological record of your desires about how you want your property distributed after your death. Nonetheless, it is important to consider that a living trust gives you more control in comparison to a will. It does not seek to bypass the probate process, which can be lengthy and expensive.
TheTakeaway
Whether you choose a living trust or a will, it is something thathas to be decided depending on personal circumstances. With a larger state size, a living trust is recommended due to its advantage of passing control over personal property without going through probate. However, if you have a smaller estate, a will may be sufficient. In the end, it is up to you to figure
out what would fit best with your preferences, intentions, and budget.
You should consult an experiencedestate planning lawyer to know which option suits you best.
