Both a will and a living trust will allow you to plan for the distribution of your estate. However, there are important differences between the two.
It is also important to note that a living trust will require a pour over will. A pour over will typically provides all property that passes through your will at death is transferred to or “poured into” your trust at your death. It essentially acts as a safety device that will capture assets not transferred into your living trust.
Living Trust Advantages:
- If you own property in another state a living trust will eliminate the need to open probate in that state (known as “ancillary probate”).
- A living trust can immediately transfer the management of your property if you become incapacitated either physically or mentally without court involvement.
- A living trust protects your privacy; it remains confidential and does not become a matter of public record.
Living Trust Disadvantages:
- Additional cost to set up and fund a living trust.
- Assets that are not titled in the name of the trust will be required to go through the probate process.
- Creditors do not have a final “cut off” date for bringing claims against the trust.
- A will is a simple way to transfer your assets to your heirs, there is no need to re-title assets.
- A personal representative is appointed through the probate process to carry out the directions in the will, if need be the court can step in and act as referee should there be any challenges or issues with the will or the process of transferring assets.
- Probate will need to be opened in the county in which you lived and typically requires you to work with an attorney through the process.
- A will does not have the same privacy protections as a trust, your will becomes public record through the probate process.