[Living Trust] Wills vs. Trusts: Key Differences in Estate Planning

Creating an estate plan is an essential process for everyone, especially when considering wills and trusts, which play pivotal roles in asset distribution and inheritance procedures. However, there are fundamental differences between these two documents.

Wills

A will is a straightforward legal document that provides instructions for distributing assets to beneficiaries after death. It takes effect only upon the individual's death and has no legal validity during the grantor's lifetime. Most wills must go through a formal legal process known as probate, which can take at least a year or longer. Additionally, if a third party challenges the will, the costs associated with court litigation can add significant financial burdens.

Trusts

A trust, on the other hand, is a more complex legal arrangement that allows for the transfer of ownership of assets. Once a trust is established and signed, it takes effect immediately, enabling the transfer of assets to avoid the cumbersome probate process after death. Specifically, a Revocable Living Trust can be modified or revoked at any time, providing flexibility in asset management without requiring probate validation for property transfers.

The Need for Estate Planning

Many people feel uncomfortable starting their estate planning process due to the thoughts surrounding death. However, trusts protect heirs from significant costs, time delays, and numerous court processes. The primary goal of a trust is to safeguard you and your family.

One of the most significant advantages of a trust is that it helps avoid the probate process associated with a will. Without a trust, the court and probate attorneys will be responsible for transferring the deceased's assets to the beneficiaries. In contrast, a trust allows assets to be swiftly distributed to beneficiaries, eliminating court fees related to executors and saving on costs.

Establishing a revocable trust is never too early. If you're contemplating estate planning, don't hesitate to consult a specialized attorney. Consider the best options for you and your family. By understanding the characteristics and benefits of both wills and trusts, you can create a more effective estate plan.