Wills and trusts serve similar purposes when it comes to planning your estate; however, there are some differences between the two. It is important to understand what a living trust is and why you might want to make one a part of your estate planning process.
What Is a Living Trust?
A trust establishes a fiduciary relationship with another party who is given authority to distribute your assets to your beneficiaries. A revocable living trust is established while you are alive and can be changed during your lifetime. You retain control of all property placed in the trust while you are alive. When you die, the trust transfers the property to your named beneficiaries. As an experienced wills lawyer, including those employed at Kaplan Law Practice, LLC can explain, living trusts operate in contrast to various kinds of irrevocable trusts that generally only “activate” once the creator has passed away.
What Are the Benefits of a Living Trust?
One of the primary benefits of a living trust is that, unlike wills, trusts do not go through probate court. This approach helps to ensure that your property is transferred to your heirs more quickly and can save money that might be spent on court costs and attorney fees for a probate case. Trusts are also usually not able to be challenged in court. Additionally, specific trust strategies can be employed to reduce the taxes imposed on estates. A living trust gives you more precise control over the transfer of your assets than a will. This can be useful for people with complex situations, such as children from different marriages.
Can You Have Both a Will and a Trust?
You can have both a will and a living trust; however, not everyone needs both. Wills are less expensive and complicated to set up than trusts, so people without complex or high-value estates may not see much benefit from establishing a trust. A will is necessary to name a guardian for minor children, so if you are establishing a trust, you will still need to have a will that names a guardian for any minor or otherwise dependent children you may have.
Which Document Takes Precedence?
Living trusts and wills are separate legal documents and usually neither will take precedence over the other. However, if a conflict exists between the two, a living trust usually will override a will, because a trust is a separate legal entity.
Most people should have a will, even if they have a living trust. However, establishing a living trust can make the process of transferring your assets to your heirs faster and less expensive. Contact a living trust lawyer to find out more about how a living trust may fit into your estate planning process.