Proper estate planning uses both simple wills and living trusts to help ensure your assets are handled according to your wishes after your death. Consider the key differences between them in order to design the best estate plan.
What benefits do wills provide?
The presence of a will makes the probate process of dividing up your assets after your death go relatively smoothly. Leaving a will allows you to make the following arrangements for your estate:
• Establish guardians for any minor dependents
• Name caretakers for your pets
• Decide your funeral arrangements
What limitations does a will have?
A will only takes effect after you die. If something happens do you before you pass away and your ability to make decisions for yourself is removed, a will cannot help you. Wills also provide you with limited ability to distribute your assets, and the probate process can take a long time to resolve.
What is a living trust?
When you create a trust, you make a legal arrangement that places a trustee in charge of your assets. If you are the initial trustee, you may name a successor trustee to handle your assets after your death. Unlike a will, a trust also goes into effect if you become incapacitated and still alive. Estate administration proceeds more smoothly because a living trust does not go through the probate court.
What should you consider when choosing a will or living trust?
You may choose a living trust if your assets are complex and you want to distribution to stay out of the courts. A will might be better if your assets are simple. Some people choose to have a will and a living trust. To make sure your choices are respected, it may be time to start working on your estate plan today.