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A Will or a Living Trust: Which Is Right For You?

Posted on in Estate Planning

Lombard estate planning attorneysYour family should not need to worry about your finances and assets after you die. That is why it is so important for you to create an estate plan. Even people of modest means have an estate and multiple options to choose from to ensure that their affairs are in order when the time comes. Two popular options are wills and living trusts. Understanding the difference between the two can help you decide which one is your best option.

A Last Will and Testament

A will is a legally binding written document that dictates how your property and assets will be distributed when you die. You can modify your will at any point during your lifetime, which means that the terms are not set in stone at the time of writing them. You can use a will to name a guardian of minor children in the event of your death, decide how debts and taxes will be paid, and name an executor of your estate.

Living Trusts

A living trust is a legal entity that is created to hold and own property. A trust is managed by a trustee, which is usually the owner, at least during his or her lifetime. The owner is also usually the beneficiary while they are alive. A trust usually names a successor trustee who will take over the management of the trust when the owner dies. Your assets can be dispersed to named beneficiaries when you die, and you will be able to maintain privacy regarding how these affairs are handled.

What Are the Differences?

Both wills and revocable living trusts can name beneficiaries to receive your property and assets after you die. They can also both be revised after they are written. However, there are many differences between wills and trusts, including:

  • Probate: Trusts allow you to avoid the probate process, meaning there will be no interference or fees from the courts regarding how the assets held in a trust are distributed to your heirs. Property and assets left in a will are required to go through the probate process;
  • Privacy: After you die, a will becomes a public document, but trusts, in most cases, do not;
  • Transferring property: In order to leave property through a trust, you must first transfer the property to the trust. Items such as real estate must be retitled to name the trust as the owner. With a will, no transfer of property is required;
  • Guardians for minor children: With a will, you can name a person to take over guardianship of minor children in the event that you die. You cannot do this with a trust;
  • Naming an executor: With a will, you can name an executor to manage your affairs after you die. This person would be responsible for communicating with the court, paying bills, and eventually distributing property left to beneficiaries. With a living trust, you name a successor trustee who will only manage the property held in the trust;
  • Complexity: Though there are no laws requiring wills or trusts to be complicated and lengthy, trusts tend to be the more complex of the two. Trust documents must also be signed by a notary public, which is a state-appointed official who certifies the authenticity of the document.

Contact a DuPage County Estate Planning Lawyer

While no rational person enjoys the idea of thinking about their death, having your affairs organized before you die will reduce stress on your family and loved ones. Both wills and living trusts can be used to accomplish these goals, and an experienced Lombard estate planning lawyer can help. Call A. Traub & Associates at 630-426-0196 to get started today.

 

Sources:

https://www.thebalance.com/living-will-vs-living-trust-3505198

https://www.aarp.org/money/estate-planning/info-09-2010/ten_things_you_should_know_about_living_trusts.html

 

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