Many people have asked me what the difference is between a WILL and a LIVING TRUST, and if they really need both or just one or the other. Or they state that their estate is fairly simple – just a house that I want to leave to my kids equally – and they think that a simple will is sufficient.
However, both a living trust and a will serve different purposes and will have difference outcomes, but both can also work together for a complete estate plan.
Both a will and a revocable living trust allow you to name beneficiaries and allow you to state how you want your assets distributed. But there are many differences between the two estate planning devices.
Listed below are some of the important differences between a Will and a Living Trust.
#1: A Will goes into effect only after you pass away. A Living Trust takes effect as soon as you create it and is especially important if you become incapacitated.
#2: A Will directs who will receive your property at your death. A Trust can be used to begin distributing property before death, at death or afterwards.
#3: Most importantly, with a Will, any assets you own, will go through PROBATE (provided that it is worth $150,000) and the proceedings and documents are public record. The court will oversee the administration of the Will and ensure that it is valid and the property gets distributed the way the decedent wanted. A Trust passes outside of probate, which is private, saves time and money.
#4: A Will allows you to name a guardian for your children and specify funeral arrangements, while a Trust does not.
#5: A Trust can be used to plan for disability or to provide savings on taxes.
#6: With a Will, any assets in your name will be distributed. With a Trust, only assets that have been transferred to the Trust will be distributed.
Your trusted estate planning attorney can tell you how best to use a Will and Trust in your estate plan.
About the Author
Christine Chung, Esq.