Will Versus Living Trust: Which Is Best For You?
Both Wills and Trusts are devices that you can use to provide for the distribution of your estate upon your death. Deciding whether a Will or a Trust best fits your needs depends on your circumstances. A Living Trust is a popular alternative to the traditional Will, but you should weigh the advantages and disadvantages of each before deciding on one form or the other.
Let’s take a look at both the Will and the Living Trust. By looking at what each does, you will be able to determine, with the help of an estate planning attorney, which instrument would be best for you. Keep in mind that often a person has both a Will and a Living Trust.
Probate
Will:
• Subject to Probate proceedings.
• Out-of-state property requires Probate proceedings in that state, as well.
• Provides court supervision for handling beneficiary challenges and creditor disputes.
• Becomes public record at the time of your death.
Living Trust:
• Not subject to Probate proceedings.
• Avoids the cost of a second-state Probate proceeding where there is out-of-state property.
• No automatic court supervision to deal with disputes.
• Remains private.
Tax Savings:
Will:
• Same tax-saving provisions available as are available in a Trust.
Living Trust:
• Same tax-saving provisions available as are available in a Will.
Management of Your Assets
Will:
• In addition to the Will, must use a Power of Attorney or Conservatorship to manage assets during your life.
Living Trust:
• Allows you as the grantor to manage the Trust assets as long as you are willing and able.
• Makes provisions for a Successor Trustee to take over in your place.
Costs
Will:
• Many attorneys charge less to prepare a Will than a Trust. But the cost to Probate a Will can be substantial.
Living Trust:
• Many attorneys charge more to prepare, fund, and manage a Trust than to prepare a Will. But avoids Probate costs if all assets were held by the Trust.
Don’t leave matters to chance and fail to draw a Will or create a Trust. If you do, a greater than necessary amount of your assets may go to state and federal governments in taxes, and your remaining assets may go to individuals other than those loved ones whom you would prefer to benefit. Whatever the reason, one thing is certain: not making out a Will or Living Trust can be a big mistake.
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