Living Trust or Will: What Suits Your Needs?

Both a living trust and a will can potentially benefit you with your estate planning. Both of these tools have different features and benefits associated with them. Here are a few things to consider about which method is the best for you.

Cost

One of the first things to consider about these two estate planning methods is the cost associated with them. In most cases, setting up a living trust is going to be much more expensive than setting up a will. In fact, you should expect to pay five or six times more to set up a living trust than you would with a will. There are many ways that you could potentially set up a will that do not involve hiring a lawyer. With a living trust, you will almost have to hire an estate planning lawyer to finish the process. Therefore, if you have limited resources, a will might be the better choice.

Time

Another key difference between these two tools is the time that it takes to set them up. With a will, you can quickly complete the necessary paperwork. You simply decide who you want to inherit your assets and fill out a document. A trust is going to require quite a bit more work on your part. Once you complete the necessary paperwork, you will also have to spend some time transferring assets into the living trust. This means that you will have to change the name on titles, deeds, and other accounts.

Holding Assets

Another difference between a living trust and a will is the ability to hold assets. With a will, your assets are going to go to your beneficiaries as soon as you die and the will is processed. With a living trust, the trust can hold onto your assets for a specific amount of time. For example, if you have a large estate and you want to hold off on giving it to one of your children, you are free to do so. You might specify that they have to wait until they are 25 before they can get their inheritance. This might help them avoid squandering a large amount of money all at once.

Probate

With a will, your family will have to go through the probate court process. This is a very public process that involves going in front of a judge. The court has to prove the validity of the will before it can be enforced. A living trust will not have to go through the probate process and your assets can be automatically transferred to your beneficiaries. This will make it much easier on your family members and avoid a very public probate process.

Guardians

If you have children that still live at home, using a will might be the better choice for you. With a will, you can name your child's guardian. With a living trust, you will not be able to do this.

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