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Living Trust Vs Will: Determining The Right Estate

By: Jane C. Smith|LRL Editor

Living Trust Probate WillThe legality between a Living Trust and a Will are commonly confused. But you shouldn't be confused at all for these vital planning tools, each have distinct purpose.

Points to consider about Living Trust Vs Will

 

WILL

A Will as is a written documentary in a special legal form by which a person states their desires on disposing of their property upon death. Assets of persons who die without a will, will be disposed of operation of law. This is a set of written instructions for naming their dependent children's guardians, distributing their estate, appointing people to oversee their estate's transition and, if in needed, a testamentary trust.

LIVING TRUST

This is a trust set up and operational while the person is still alive. The reason why this is called a Living Trust is because the person owns all the property of the person who sets it up. That person acts as trustee during their lifetime. A Living Trust will allow the trustee to provide for the quick and efficient distribution of their property to their loved ones when they past away. Living Trust gives the trustee the legal right to manage and control their assets they held in their hands. It also instructs the trustee to manage the trust's assets for their benefits during their lifetime. Lastly, they name the beneficiaries who are to receive their trust's assets when they die.

Types of Living Trust

• Revocable A Trust
• Bypass/A-Disclaimer Trust
• A/B Trust

Understanding Living Trust Vs Will
 
• Living Trusts don't replace wills; they are used with a will called a "pour over will"
• Living Trusts don't take away your control of assets
• Living Trusts don't protect assets from lawsuits
• Living Trusts do not provide income tax benefits
• Living Trusts don't protect assets from creditors
• Living Trusts don't prevent Medicaid spend-down

• Wills don't affect control of your assets since they will become active only when you pass away
• Wills don't prevent probate
• Wills are used to name guardians for dependent children
• Wills have distribution instructions
• Wills can create testamentary trusts to hold and control when and how assets are distributed to beneficiaries
 
Before choosing the right estate plan, you might want to ask some of these questions to yourself:

• Is informal probate an available option?
• Are you owning more that one piece of real property
• Do you have minor children?
• Who are your dependents and what are their special needs
• Will your estate be subjected to estate taxes?
• Are you going to be able to manage your estate plan

Having to know which is best for you will depend on identifying your goals. Who you want to oversee the transition of your estate, what you are willing to pay and your willingness to maintain your estate plan once documents are singed.

Considerations on a Living Trust Vs Will, will make you determine the needs of your own for being prepared for you and your loved one's future.

Related Topics:

What Is Probate: The Concept Defined

Probate Will: Knowing What It Is Really About

Probate Process: Several Considerations You Should Not Ignore

What Is A Living Trust? Learn The Meaning Of Creating A Living Trust