Will vs. Living Trust : What is Better for You ?

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Will vs. Living Trust : What is Better for You ?

Whether a living trust is better for you than a will depends on whether or not the extra options it provides are worth the cost.

You have worked arduously for your money and made every attempt to be an accurate saver. So it is only natural that you want some control over what happens to your assets after you pass away. Even if you are a person of moderate means, you have an estate. Therefore, you should have an estate plan, a scheme to ensure your assets are distributed according to your wishes, and in a timely manner.

The right strategy depends on your individual circumstances. For some, a loving trust can be a useful and practical tool. For some others, it might be a waste of time and money.

What is a Will ?

A will is a written document. It indicates the method through which your property will be alloted at the time of your death.

It is cancellable and subject to change at any time during your lifetime. It also permits you to allot a guardian for your minor children.

What Is a Living Trust ?

A living trust gives lifetime and after-death property management. If you are working as your own trustee, the trust instrument will provide for a backup after your death or incapacity. Court intervention is not required.

Living trusts are also used to manage property. If someone is disabled by accident or illness, the successor trustee will manage the trust property. Therefore, the expense, publicity and inconvenience of court-supervised distribution of your estate can be avoided.

If a living trust is correctly written and funded you will be able to :

Avoid Probate on your assets.

Plan for the chance of your own incapacity.

Control what happens to your property after you gone.

Use it for any size estate.

Prevent your financial affairs from turning into a matter of public record.

There are drawbacks while a trust sounds appealing.

While a trust is more expensive to set up than a typical will because it must be actively managed after it is created. Unless a living trust is funded it is useless.

A living trust can solely manage those assets that are placed into it.

The funding method is critical however may be tedious. In case your assets have not been transferred or if you die without funding the trust, then the trust will be of no benefit as your estate will still be subject to probate and there could also be critical state estate tax issues.

Will vs. Living Trust Considerations

There are numerous positive reasons to establish a trust however do not overlook the very fact that it will involve a lot of direct effort and expense.

To decide if you should make the extra effort and invest in the expense of a trust, answer these queries :

A .Is informal probate an available option ?

Most of the states have a speed or simplified form of probate for estates under a certain dollar threshold.

A will could be appropriate, if your estate could pass under a quicker form of probate, or if you live in a state where probate is not a complex or burdensome process.

B .Will you actively manage your estate plan ?

If not, a living trust might not be a suitable solution. A trust can solely be helpful if assets are transferred into it.

So which is best for you ?

In several respects, a living trust and a will accomplish similar objectives. A trust, however, permits you to appreciate other objectives that a will can not.

But these advantages don’t come without a price. What is right for one person might not be right for everybody. Your estate set up ought to be ready in a different method that best meets the requirements of you and your family.