When you have worked hard to earn and save money throughout your life it is natural to want to make sure you have control of your assets after you die. Even if you have lived as a person of modest means, you still have an estate. An important thing to ask yourself is, “Do I have the proper plan in place for the distribution of my assets after I die?”
Figuring out what that plan is will depend on your personal circumstances. For many people, a living trust is the most useful and practical. However, for some people a will is all they need. What is the difference between the two? Here is a breakdown of each.
What is a will?
A will is a document that indicates precisely how you want your property distributed after you die. You can continue to change or update your will at any point during your lifetime. You can also use a will to appoint a guardian for minor children. By using a will your estate does become public record and all items that are left in a will are required to go through the probate court process. Probate court is responsible for settling wills, trusts, conservatorships and guardianships.
What is a living trust?
A living trust manages your property during your lifetime and after your death. A trust can also be changed or updated at any time until your death. But a living trust does not need to go through probate court and property can immediately go directly to the beneficiaries you named. Other benefits of a living trust include providing a plan if you become incapacitated and keeping your financial information from becoming public record.
Both a will and a living trust provide many options that should be explored in-depth with a trusted professional on estate planning. If you decide not to create an estate plan, the court system and others will be making these decisions for you.