What's the Difference Between a Will and a Living Trust?

Most people know that a Will and a Living Trust are documents that determine how your estate will be handled upon your death. Unfortunately, very few people know the difference between the two; therefore they may not always choose the most beneficial document for their needs. Here are some things you will need to know when deciding whether a Will or a Living Trust would be more appropriate choice for you.

A Will is a legal document that allows you to chose and executor to carry out the requests of your will. An executor is a person who you assign in your will to be in charge of getting specific items to specific people. In addition to who will be responsible for your belongings, a Will also allows you the chance to choose a guardian for your children after your death.

A Living Trust is also a document that determines your estate after your death but there are different guidelines on whom and how your estate will be handled. A living estate is revocable and will allow for changes to be made through out your lifetime. While a Will is only for items that have been specified, a Living Trust will ultimately distribute all of your belongings if you have created a Pour-over Will to accommodate your Trust. A Pour-over Will is an addition that allows all belongings that have not been assigned to the Trust to still be distributed by your successor trustee (or executor).

A Living Trust is not only beneficial after your death, but before you die. In the event that you have become disabled or incapacitated, your trustee will be responsible for handling your financial obligations and implementing your personal wishes such as to be or not to be left on life support.

In the event that you are married, you and your spouse may also chose to have joint Living Trust. This will conjoin your assets as husband and wife into one trust and will be one document. This document will sometimes require an attorney depending on the amount of the estate.

Here are some Pro's and Con's for both Wills and Living Trusts:

Will Pro's:

1. Can be created easier then a Living Trust

2. Costs less to prepare

3. Provides court supervision for handling beneficiary challenges and creditor disputes.

Will Con's:

1. Subject to many probate proceedings

2. Must use a Power of Attorney in addition to the Will

3 . Costs to probate a Will can be substantial

Living Trust Pro's:

1. No automatic court supervisions to deal with disputes

2. Not subject to probate

3. Remains Private

4. Allows you to manage the estates as long as your are capable

5. Allows for successor trustee to take over in your place

Living Trust Con's:

1. Requires more time to manage

2. Costs more to prepare

Now that you are aware of the differences between a Will and a Living Trust, you can now determine the best option for you and your loved ones. Once you have chosen which one is appropriate for you, you will then need to choose an attorney or appropriate guidance to establish your Will or Living Trust.