What Are the Differences Between Living Trusts and Wills?
Two of the most important estate planning tools are a living trust and a will. These legal processes both have distinct benefits and characteristics. Understanding the differences between the two can help you determine which best serves your needs – or if it is in your best interest to have both a living trust and a will to fully protect your assets and loved ones.
What Is a Will?
A last will and testament is a legal document that determines how an individual’s assets and affairs will be handled upon his or her death. A will enables the creator to choose a personal representative, also known as an administrator or executor, who is responsible for executing the wishes expressed in the will and distributing assets after death.
A will allows the creator to name beneficiaries who will receive assets or property after the creator’s death. However, a will does not re-title an item or piece of property and automatically put it in the recipient’s name. A will can designate a power of attorney, plan for end-of-life health care and name legal guardians for dependents.
What Is a Living Trust?
A living trust is an active fund that holds an individual’s assets until a designated time, such as upon the person’s death, incapacitation or another date of the creator’s choosing. It appoints a trustee to manage and distribute property put into the trust. It is known as a “living” trust because the creator remains in control over the assets while he or she is still alive, and may amend or revoke the trust at any time (if it is a revocable living trust).
Like a will, a living trust can be used to name beneficiaries who will receive assets and property. Unlike a will, however, a living trust can distribute assets to beneficiaries before the creator’s death, if desired. A living trust is a good option for individuals who have complex estates, such as multiple properties or high-value assets. In general, a will is not sufficient protection for a complex estate plan.
Key Difference: A Will Does Not Avoid Probate
One of the most important differences between a living trust and a will is that a living trust effectively avoids the probate process, while a will does not. A trustee named in a living trust replaces the role of the personal representative in probate court. By contrast, a will directs the probate process if it is admitted into evidence in probate court.
If you wish to protect your estate and beneficiaries from probate after your death, it is a good idea to have a living trust in place rather than a will alone. Property that goes through a living trust is protected from probate, which can save your family members time and money, as well as protect your property from the uncertainty of probate court decisions if your will is not admitted as evidence.
When to Hire an Estate Planning Attorney in St. Louis
If you want a comprehensive estate plan that soundly protects your estate and beneficiaries in the future, you may wish to create both a living trust and a will. A living trust can protect your assets and allow you to avoid probate, while a will gives you the opportunity to name an executor and guardians for any dependents you may leave behind.
The best way to determine whether you need a living trust, a will, or both is through a personalized consultation with an estate planning attorney in St. Louis. At TdD Attorneys at Law LLC, our lawyers will analyze your specific situation and goals before giving you our tailored recommendations. Contact us at (314) 276-1318 today to schedule a free consultation.