Estate planning entails choosing between a living trust and a will to pass assets on to heirs. Both are legal tools that can assist you in achieving your goals, but each serves a different purpose. It’s essential to differentiate between a living trust and a will as understanding how they affect estate planning will aid in selecting the best option.
Understanding the Will
A will expresses how a person wishes their property to be handled after their death. For instance, you can use a will to specify the division of assets among your spouse and children after your passing. A will goes through probate, a process in which the court validates the will and oversees the distribution of assets. Consequently, a will lacks privacy. After probate, it becomes a public record, accessible to anyone interested in its contents and asset distribution. Moreover, a will typically distributes the property in a lump sum, and beneficiaries may be responsible for settling taxes and debts associated with the estate.
Unveiling the Living Trust
On the other hand, a living trust is a legal document that allows someone to transfer their property to a trustee, who will manage it for the benefit of beneficiaries, such as a husband or wife, children, or an organization. Once the property is transferred into the trust, it takes immediate effect, enabling the trustee to oversee the assets for the beneficiaries. This provides several advantages, including avoiding probate, maintaining privacy, and ensuring a continuous income stream for beneficiaries. Additionally, it can take effect if the grantor is unable to manage their own affairs due to illness or injury, at which point a successor trustee assumes control of the assets outlined in the trust document.
Distinguishing Between the Two: Will vs. Living Trust
When it comes to estate planning, choosing between a living trust and a will requires careful consideration.
While both options have their merits, a living trust offers distinct advantages that make it a compelling choice. One of its primary benefits is the ability to bypass the often lengthy and costly probate process, ensuring a more efficient and cost-effective distribution of assets. Additionally, a living trust provides precise control over asset distribution, enabling tailored support for beneficiaries based on their unique needs and circumstances. Furthermore, this trust offers a seamless transition of asset management in case of your incapacity, providing crucial financial stability during challenging times. Despite these advantages, it’s essential to recognize that wills also have their place, especially for those with simpler estates.
Consulting an attorney is vital to navigate these options effectively, ensuring that your estate plan aligns with your specific goals and needs.
Established 100 years ago, Quinlivan & Hughes, P.A., ranks among the oldest and one of the largest law practices in central Minnesota. The full-service law firm has growing legal teams in the areas of employment law, business law, government law, insurance defense, trust and estate planning, and general litigation. Learn more at Quinlivan.com.
