Wills and Living Trusts: What’s the Difference?
A will is not the only way to distribute your assets after you’re gone. In some circumstances, a living trust might be a better tool to distribute your estate. If you’re starting the estate planning process, one of the first things to ask your attorney is how you can best use these planning tools. Here are a few considerations:
Wills and Living Wills
A last will and testament specifies what you would like to leave to beneficiaries, can make charitable gifts, identifies an executor to administer your estate, and can name a potential guardian for your children (if applicable). A will can also dictate burial arrangements. A last will and testament only comes into operation once you have died, and must be probated through the Surrogate. A living will, however, is a document that has use during your lifetime. This document can identify a person to make health care decisions for you if you are not able to make them; and also can specify what types of health care treatment you would like in different situations, including end-of-life care and hospice.
Living trusts are documents that allow you to name beneficiaries of your estate without having to go through the probate process. It works by transferring ownership of some or all of your assets to the trust; the trust then becomes the legal owner of the property. You make yourself the beneficiary of the trust during your lifetime. After you die, there are “residual beneficiaries” of the trust, who essentially inherit the assets. Because a living trust is not subject to probate, a living trust keeps the details of your estate private. It also is a more streamlined process, because the assets in the trust don’t change ownership upon the death of the first beneficiaries. Depending on the timing of the creation of the trust and the size of the estate, there may also be tax advantages to setting up a living trust.
Determining the difference between a will and a living trust is just one of the questions to answer during the estate planning process. This is why it’s important to enlist the services of an experienced and qualified attorney when the time comes.
Make is easier on your family. Let the attorneys at Posternock Apell, PC help you develop a comprehensive and easily executable Will and Estate Plan. We can also sit down and review the plan you already have in place. It’s never too soon to plan ahead. Call us today to get started.