Living Trust vs Will
A living trust and a will are legal documents. There are differences between a living trust and a will. Both the documents are equally important. They deal with your will for your estate and other property. If one gets incapable of looking after one’s estate due to illness or death, these legal documents help in providing options.
It is always advised that a person should have both these documents; just one is not enough. They can be drawn up by a person himself, or a lawyer can prepare these legal documents for a fee. The choice, whether to hire a lawyer or not, depends upon the complications involved in one’s estate and the sums of money involved. Hiring a qualified lawyer is always better.
A will directs how one’s estate and property have to be distributed after death. It designates guardians for children in case of death or incapacity to look after them. It is subject to probate proceedings. The court might take some time in cases of disputes and appoints automatic court supervision if there is a dispute. It can be prepared by a lawyer or by oneself. There are will kits available which help draw up a will on your own. It cannot be changed after it has been written. After one’s death the will becomes public record.
A living trust can be changed or amended whenever the need arises. In living trusts there is no probate proceedings. The property goes directly to the heirs. In case of disputes, no court supervision is required thus cutting down on the waiting period before the property is distributed. The Trust remains private. All proceedings remain private, and disputes can be worked out privately. It is expensive to prepare, manage, and fund the trust as qualified attorneys are required to prepare the trust. But later the costs are saved by avoiding state court probate proceedings.
1.A living trust is not subject to proceedings of probate. When there is out-of-state property, the living trust helps in avoiding the cost of other state proceedings. To deal with creditor disputes, there is no automatic court supervision required. The trust remains private.
2.A will is subject to probate proceedings. For out-of-state property, probate proceedings in that state are also required, thus it costs more. For disputes, automatic court supervision is provided. A will becomes public record after death.
3.Until a person is able and willing, the living trust allows him to manage his Trust assets. When one is no longer able or willing, the Trust provides a successor trustee to manage the assets.
4.For a will, the assets have to be managed with a Power of Attorney.
5.Living Trusts cost more in managing, preparing, and funding, but they save probate costs provided all the assets are handled by the trust.
6.A will costs less in preparing, but the probate costs can be significant.
7.Living trusts can be changed; a will cannot be changed.