Will Versus Living Trust
The perfect answer to the will versus living trust question
It is crucial to first, understand the meaning of a will and living trust to compare a will versus living trust. They both are aimed at transferring the assets of a person after they die, but they do it in different fashions. The main difference in the mode of operation of the two is that one goes to court while the other remains private.
A will is a document, which is legal that indicates to the probate court the person, persons or institution that the probate qualified property will go to. The probate qualified property goes to the heir at the death of the individual with no co-owner or beneficiary title. The individual that is holding the will cannot avoid a probate.
The Living Trust
On the other hand, an individual creates a living trust fund while he or she is alive and what it does is that, it transfers the title or ownership of the individual’s assets to a trust, which is a separate entity. After the death of the individual, the assets are distributed to the heirs according to the instruction the individual left before his or her death. Here, the purpose is to avoid the law courts and the tedious process and lack of privacy that comes with it. Typically, the grantor is usually the creator of the trust, and the primary beneficiaries are the immediate family members.
In short, the way that the two are administered before and after death is the main difference. Where there is a ‘will’, an individual has the privilege to adjust it if he or she wants, but thereafter, not much can be done. One can only sign it, make some changes to the life insurance and retirement plans, and put it away in a safe place. The real process begins after death, whereby, the family meets the lawyer and probate court proceeding are started. Typically, these proceedings can be particularly lengthy lasting up to 14 months, and they are not free of charge. The lawyers will want a percentage of the estate usually between two to four percent or may charge by the hour, which may add up to a figure close to $10,000 or even more.
On quite the opposite note, most of the work happens when the grantor is still alive. This is because, after the creation of the living trust, the person must fund it. All the qualified probate property must be transferred, while the primary and reliant beneficiaries must point to the trust. When the funding is complete, and the grantor has passed, then probate will be avoided because the deceased does not own any probate qualified property but instead is owned by the trust. This, in turn, makes the process of transfer of property after death much easier, private and quicker than when the courts are involved. Someone called a successor trustee oversees the management of the assets and property for the beneficiaries.
While considering will versus living trust, a beneficial point is raised in a living trust whereby, it gives financial assistance should the individual become incapacitated. Here, the successor trustee will manage the trust in a manner that will benefit the grantor in paying bills. Here, the question of requiring a guardian is avoided something that is not possible in a will.
Conclusion
As a conclusion, the will versus living trust question will always be in the lips of many but, as explained above the better choice is obviously the living trust keeping in mind that the attorney fees never shrink but tend to bloat day after day. To get the much-needed privacy, speed, and affordable way to settle things after death, the answer to the will versus living trust question is quite clear.