When it comes to estate planning, there are a variety of options available to individuals. One of the most common questions is whether to create a Last Will or Living Trust. While both provide certain benefits, there are also key differences between the two.
Video: Last Will Versus A Living Trust
What is a Last Will?
A Last Will is a legal document that outlines an individual's wishes regarding their property and assets after they die. This includes specifying who should inherit these items, as well as any conditions that must be met in order for the inheritance to take place. A Last Will can also be used to appoint a guardian for minor children.
What is a Living Trust?
A Living Trust, on the other hand, is a legal arrangement that allows an individual to transfer ownership of their property and assets to a trust during their lifetime. The Trustee manages the trust and distributes the assets according to the terms of the trust. Living Trusts can be revocable or irrevocable.
There are a few key differences between Last Wills and Living Trusts
First, a Last Will only takes effect after an individual's death, whereas a Living Trust is effective during their lifetime. Second, Last Wills must go through probate, which is a court process that can be time-consuming and expensive. Living Trusts, on the other hand, do not have to go through probate.
Another key difference is that Last Wills are public documents, meaning that anyone can request a copy of them. Living Trusts, on the other hand, are private documents and only the trustee and beneficiaries have access to them.
Finally, Last Wills can be changed at any time, whereas Living Trusts can only be changed if they are revocable.
So, which one is right for you?
It depends on your individual circumstances. If you want your assets to go through probate, then a Last Will may be the best option. However, if you want to avoid probate or keep your estate private, then a Living Trust may be a better choice.
Advantages of a Last Will:
- A Last Will is less expensive than setting up a Living Trust.
- A Last Will is simpler to create than a Living Trust.
- You can name a guardian for your minor children in a Last Will.
- A Last Will can be changed at any time, whereas a Living Trust can only be changed if it is revocable.
Advantages of Living Trust:
- Living Trusts avoid probate.
- Living Trusts are private documents, whereas Last Wills are public records.
- Assets in a Living Trust can be managed by the trustee if you become incapacitated.
No matter what route you choose, Last Will or Living Trust, both have their own set of advantages and disadvantages. By taking the time to create a Last Will or Living Trust, you can ensure that your wishes are carried out after you die and that your loved ones are taken care of.
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