Will vs. Living Trust: What is the Difference?
May 7, 2018 in Educational
How will your assets be managed after you die? Wills and trusts are two common estate planning documents. Both documents list a person’s assets. Both designate who will be in charge of the distribution of assets. Both identify beneficiaries. It is therefore common for folks to ask, “What is the difference between a will and a trust, and which one is more suitable for my needs?”
While both provide instructions for the transfer of assets at death, the key difference between a will and a trust is Probate. If a person dies with a will or without a will, the deceased person’s estate must go through Probate. The process is overseen by the court and it is public, lengthy, and costly.
A will is the traditional estate planning document. However, for many, the will leads to a complex process called Probate. Probate is the court process by which a will is proved valid or invalid. The will becomes public record during probate, thus bringing any family matters or disagreements into light. This public setting also often opens the door to outside interference. A trust, on the other hand, provides privacy as the beneficiaries and trustees named in the document are typically the only people involved.
Additionally, Probate is a lengthy process, especially in California and the busier counties. Some probates take years to go through the court proceedings. A living trust, however, can be administered within months and often with no court costs. In contrast, Probate requires certain costs throughout the process and mandatory statutory legal fees in the end.
Simply, a will leads to probate and a properly established trust avoids it.
Who Should Have a Living Trust?
Families with children, persons who own real estate, and anyone who has assets without contractually named beneficiaries should seriously consider a trust to avoid the unnecessary costs, significant delay, and public setting of court during Probate. If you want to know more, contact the Law Offices of Belgum, Fry & Van Allen for details. We will walk you through the process and work with you to see what options are best for you and your loved ones.