When it comes to planning how your assets are going to be dispersed after you die, you probably have many questions. There is a lot of legal jargon involved that it may feel overwhelming, and you may be tempted to go with what sounds most familiar, just so you can finish quickly. Wills are common documents, and they may provide exactly what you need, but you may actually need a living trust. There are differences between the two in what they cover and how they handle your assets. Before deciding on one or the other, do your research and figure out which one you actually need.
What Is A Will?
A will is a document that explains how you want your affairs handled once you pass. Wills can include information regarding every one of your wishes that you want to be carried out, from your funeral arrangements to the division of your assets. It will state who your beneficiaries are and which assets they will receive after your death. In addition to your beneficiaries, you’ll also name an executor in your will. Your executor will be the person who will make sure that all the instructions in your will are followed. You can choose a close friend or family member to handle it, or you can choose a third party, like a bank or a financial establishment.
What Is A Living Trust?
A living trust is a type of legal document that allows the person crafting it to name a trustee who is responsible for the management of their assets. These go into effect while you’re still alive, and unlike wills, they stay completely private both before and after you pass. A living trust in California and other states will also protect your assets in case you are incapacitated due to accident or illness before your death.
No Probate with a Living Trust
One of the main benefits that individuals gain from having a living trust is that there is no legal probate to go through. Probate is the process that happens when a deceased person’s estate is being distributed according to their will. This can take months to years to complete depending on the complexity of the individual’s estate. During probate, there are a lot of legal processes that must be followed to distribute the assets accordingly. With a living trust, you can skip over the entire probate process. The trustee has full control over the assets and can disperse them freely.
It Depends on Your Assets
If you have a lot of assets, then you may want to consider constructing a living trust. This will assist you in creating an easy stream of passing your assets to your beneficiaries without having to go through the probate process. If you don’t have many assets, then constructing a will may be in your best interests. A will is much simpler to create.
Hopefully, you now have a better idea of what the difference is between a living trust and a will. Both of these legal documents play a vital role in helping to divvy up assets. You should consult with your estate attorney to determine which one is best for your individual situation.
