A living trust is a legal document that designates a particular individual to manage your property and assets during your lifetime. It can be altered or dissolved at any time of your choosing, but becomes irrevocable after your death.
A will is a written document that states how your property will be distributed once you die. In order for it to become legal, it must be signed and witnessed. A will may be amended during your lifetime. It also allows you to appoint a guardian for your minor children in the event of your death.
Will vs. Trust
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Unlike a standard will, a living trust is very cost-effective. It allows you to avoid the delays and expenses associated with probate court. A will can take up to 3 years to go through probate. During this period, the value of your estate can depreciate by as much as 10%.
With a living trust, there are no delays. You can immediately transfer the management of your assets and property to your trustee. With a standard will, the court will have to appoint a guardian or conservator to manage your estate. This can be quite a lengthy process.
A living trust clearly states the kind of care you should receive if you ever become incapacitated or terminally ill and who will manage your estate if you are unable to do so. In the case of a will, it mainly addresses what should happen after your death.
With a living trust, there is a high level of privacy. It is a legal contract made between you and the trustee. As a result, you don’t have to file it with the courts clerk. In the case of a will, you have to file probate documents with the courts and each hearing will become a matter of public record. This means that individuals who are not beneficiaries or members of your family will have access to your Last Will and Testament.
A living trust may cost more to set up, but it definitely has more advantages than a standard will. It simply caters to all the essential aspects of proper estate planning.