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Difference between Living Trust and Will

When it comes to estate planning, there are a few key documents that everyone should have. These include a will and a living trust. While both of these documents serve important purposes, they do have some key differences. In this post, we will take a look at the difference between living trusts and wills, and explain why it is important to have both in your estate plan.

What is Living Trust?

Living Trust is an arrangement where you, the Grantor, appoint a Trustee to hold and manage property for the benefit of named Beneficiaries. A Living Trust can help you avoid probate, protect your assets from creditors, and manage your property if you become incapacitated. You can be both the Grantor and the Trustee of your Living Trust, and you can revoke or change the terms of your Living Trust at any time. If you want your Living Trust to be used to manage your property after your death, you will need to name a Successor Trustee. When done correctly, a Living Trust can provide many benefits for you and your family.

What is Will?

A Will is a legal document that allows a person to specify how their assets will be distributed after their death. The Will must be in writing and signed by the testator, or person making the Will. In some jurisdictions, the Will must also be witnessed by two or more people. Once the Will is executed, it should be kept in a safe place where it can be easily accessed by the executor, or person who is responsible for carrying out the instructions in the Will. A Will can be changed at any time as long as the testator has the mental capacity to do so. Making a Will is an important way to ensure that your wishes are carried out after your death and that your loved ones are taken care of.

Difference between Living Trust and Will

  • A Living Trust is a legal document that creates a trust during your lifetime. All property transferred to the Living Trust avoids probate at your death. A Will is a legal document that only becomes effective upon your death. When you die, all property not specifically bequeathed by the Will passes to your heirs through the probate court. If you have a Living Trust, there is no need for a Will because the Living Trust controls all of your property both during life and after death.
  • A key difference between a Living Trust and a Will is that a Living Trust avoids probate while a Will does not. Probate can be expensive and time-consuming, so avoiding it can be a significant advantage. Another difference between Living Trusts and Wills is that Living Trusts can be used to provide for management of your property if you become incapacitated, while Wills cannot.
  • If you become incapacitated and do not have a Living Trust, someone will need to go to court to be appointed as your guardian or conservator in order to manage your property for you. Having a Living Trust avoids the need for court involvement in your affairs if you become incapacitated.

Conclusion

Living trusts and wills are both estate planning documents that allow you to designate who will manage your property after you die. However, there are some key differences between the two. A living trust is a trust that you create while you’re still alive, and it goes into effect as soon as you sign it. A will, on the other hand, doesn’t take effect until after you die. Additionally, a living trust can help avoid probate, which is the legal process of distributing your property after death. Wills also have to go through probate.

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