Living Trust vs. Will: Which is the Better Option for You
Determining what to do with your assets after you pass is important. But when it comes to a living trust vs. will, which is the better option for you?
Did you know that more than 67% of people in the United States don't have a will? No matter whether you're in your 20s or 60s, it is important to have either a will or a living trust. That way, after you pass, it will be easy for those who survive you to distribute your belongings without any problems or conflict.
But when it comes to a living trust vs. will, you might be wondering what the difference between them is. Aren't they the same? Are there any meaningful differences between them?
Which option is best for you and your estate planning? Keep reading and learn more about the difference between a living trust and a will.
What You Need To Know About a Will
Traditionally, people have always chosen wills to distribute their belongings after their passing. A will specifically dictates the division of your possessions only after you die. A will won't do much of anything while you're still alive.
A will typically allows you to pass on your belongings to your children, spouse, or other family members. However, you can create your will however you want and you can decide who exactly you want to receive your belongings and assets after you die. Of course, there are a few pros and cons that come along with a will.
For example, if you decide to choose a will to distribute your assets, there will most likely be probate process that your descendent will need to go through. The probate process is a process that determines the authenticity of the will. This process rakes up some extra fees that can be frustrating to deal with. Probate is not only time consuming and it is also expensive.
It can also lengthen the process of distributing the assets in the will, especially if any part of the will is left unclear. The executor of the will is in charge of this and you can appoint the executor of the will beforehand. If money is not an issue for your family, the cost of the probate process likely will not be much of a problem.
The Details Behind a Will
However, the probate process can still be somewhat frustrating to go through. It is important to have a will or a living trust no matter what age you are. This is especially true if you have many expensive assets or a valuable estate.
Without a will, there is no sure way in which your assets will be distributed. In Arizona they will follow the state law for Probate. For that reason, much of the decision-making will go to government officials such as judges. Of course, if the decision of the judge is much different than what you or your family would have wanted, this can cause several problems among your family after your passing. That process can be specially painful if you have a Blended Family.
While you can technically create a will on your own, this is usually not recommended, especially if you are not familiar with the process. Instead, you should work with an estate planning lawyer or someone who crafts wills for a living. That way, you will be sure that your will is in good working order and won't cause any problems after your passing.
But how does a will compare to a living trust?
What You Need To Know About a Living Trust
What is a living trust, you might ask? While a living trust does have some similarities to a will, there are some important differences that you need to consider. The first and most important difference is that a living trust does not only come into effect after your passing as a will does.
Instead, a living trust is active while you are still alive. As soon as you complete all the necessary documentation, your living trust will be in effect. Specifically, whatever assets you list for the living trust will enter that trust as soon as you complete all the documentation.
Keep in mind that you aren't locking away your assets and never touching them again once you do this. In fact, you will be in charge of managing whatever assets you put into your living trust while you are still alive. In a way, you can think of this as a sort of investment for your family.
The Benefits of a Living Trust
Another difference between a living trust and a will is that there are no probate process associated with living trusts. Probate is only avoided if you properly fund your Trust though. In fact, if your Trust has been properly funded there is no probate process at all. As you can imagine, this can save everyone a lot of time and money down the line.
If you are looking for an affordable option to distribute your assets while you're alive or after you've passed, a living trust is certainly the best option. A living trust is also far more resistant to live changes and challenges. For example, suppose that a child or grandchild is born into your family and that new individual will eventually need to gain access to that trust. A Trust attorney should take that into account when they design your trust.
While you are still alive, you can easily change the conditions of your living trust to accommodate new people or to take certain individuals out. This is much harder with a will as you will need to create an entirely new will. And, of course, if you have already passed, there is no way to change the will at all.
Living Trust vs. Will
If you are debating between a living trust vs. will, you will find that there are pros and cons to each choice. A will is a more traditional choice but it comes with the probate process and it is only active after your death. A living Trust properly funded does not involve the probate process and it is active while you are still alive.
Citadel Law Firm PLLC will be pleased to help you with the best option for you. We offer you a free consultation to meet all estate planning attorneys and decide if we are the right law firm for you. To learn more about estate planning, contact us here. You can click here to schedule your free estate planning consultation or call (480) 565-8020.