It’s been said that nothing is certain in life but death and taxes, but did you know that most adults are not prepared for the latter? According to NOLO only 54% of adults have a will, and, thankfully, 72% of them are parents.
If you’re in that group that doesn’t have a will, or you may know you need one, do you need a living trust as well? What’s the difference?
In short, a will and a living trust both allow you to name beneficiaries to your estate. That is where the similarities end. Here are some of the differences that may be important to your plan.
1. Having a Will Doesn’t Mean Avoiding Probate
One of the biggest issues that can occur after a loved one dies is figuring out how the estate will be divided. Although a will may clearly state all of your wishes, your heirs can get into a heated legal debate after you’re gone.
In a living trust, however, you transfer property before you die, meaning that property ownership simply transfers to your named beneficiary upon your death. A married couple can use a single living trust to manage any co-owned or separately owned property; which is not possible with a will.
2. A Living Trust Is Kept Private
If you have a large estate, you may not want all of your personal affairs to become public, especially if there is a battle among your heirs.
While a will is part of the public record, a living trust is not. When you die, your will must be submitted to probate court—even if there won’t be any probate court proceedings.
The trust is only shared with the parties involved. Unless a court battle ensues (which is rare) details of your estate will never be made public.
3. A Living Trust Outlines Your Wishes While You’re Alive and Incapacitated
While a will only covers your wishes after your death, a living trust can be brought into play while you are alive in the event that you are no longer able to manage your affairs.
In the trust you can name your spouse, partner, or another person to make important decisions when you cannot.
If you do not have a living trust, you will need to have a living will to manager this aspect. Otherwise, your estate could go into a conservatorship and a judge will appoint whom they deem most fit to manage your finances and estate.
You May Need a Will, a Trust, or Both
Each situation is unique, and it’s challenging to say which option is the best way to protect your estate and your family when you die. If you have children, there are some things you can do in your will that cannot be handled through a trust—and vice versa.
Don’t take chances with your loved ones’ futures. Trust a caring attorney who has experience developing estate plans for people of all income levels, with children and without.
Remember, even if you only have minimal assets, you should still have a plan in place to ensure your wishes are carried out; you’re never too rich or poor to need a proper estate plan!
Engaging with an attorney to protect your family is never an easy step. Whether you need to protect your family from the unthinkable or restructure your family through collaborative divorce, we’re here to help. When you’re ready to schedule a consultation with Michelle Ogborne, please visit the scheduling page to get started.