In recent years, an increasing number of individuals have recognized the significance of estate planning and are exploring different legal avenues to simplify matters for their loved ones after they pass away. If you are contemplating estate planning, it’s important to comprehend the distinction between a will and a living trust. While both are legal documents used to communicate and allocate your assets, their similarities end there. Please continue reading to learn how a living trust differs from a will and why connecting with an experienced Montgomery County Estate Planning Attorney is in your best interest.
What is the Difference Between a Will and a Living Trust?
The primary differences between a will and a living trust are what they can include and how they are managed. However, despite their differences, both are key estate planning tools intended to safeguard and distribute assets to your loved ones after death.
A last will and testament is a legal document in which you outline your wishes for the distribution of your property after you die. Essentially, you will provide instructions for how you would like your assets handled after your death. You can also use your will to name beneficiaries to receive your assets and appoint guardians for your minor children. Typically, you will designate an executor. An executor is responsible for carrying out the wishes and instructions outlined in the will. After your death, the executor will pay any debts or taxes and sort out who gets what based on the terms of your will. This is known as the probable process, notorious for being drawn out and expensive.
Similar to a will, a living trust is a legal document you can use to name beneficiaries for your property. However, beyond that, the two legal documents are distinct. With a living trust, Your assets will be placed into a trust fund until a predetermined time. The assets within it are distributed upon your death or another date of your choosing. Essentially, you will transfer ownership of your assets to the trust account. You will assign a trustee to be responsible for the assets in the account on behalf of the beneficiaries. The trustee takes the place of an executor working with the probate court.
It’s important to understand that property passing through a living trust is not subject to probate. This can save your loved ones a considerable amount of time and money. Many people opt for living trusts specifically to avoid the probate process. However, establishing and maintaining a living trust can be more complex and expensive. With a living trust, you cannot name an executor or guardian for your minor children. This means you still need a will to carry out those objectives, even with a living trust. Therefore, many people choose to establish both legal documents.
If you fail to create a will or a living trust, your property will be distributed according to intestate succession laws. For quality legal assistance, it’s in your best interest to contact a determined attorney from JD Katz, who can help you protect your hard-earned assets.