While the living trusts and wills turn out to be the two primary instruments in estate planning, unfortunately, many people don’t have a clear idea of the differences between them. Per a survey conducted by Caring.com, there is only 32% of Americans encompassing the living trust or will. This is quite surprising, given that not having these documents can lead to serious consequences. Through understanding this, it becomes paramount to take cognizance of it so that individuals get protected, and their loved ones do not suffer. Today, you’re diving into the world of living trusts and wills to finally clear up any confusion surrounding them.
Understanding Living Trusts
A living trust is a legal paperwork that holds your estate matters during your lifetime and further describes how you want them to be handled and transferred after you die. In Illinois, where the estate laws may be rather complicated, creating a living trust can help obtain more advantages. It will make sure your estate avoids probate, a time-consuming and expensive legal proceeding and protects your privacy as trusts are not part of public record.
Rather, a trust is formed through a process of a transfer of ownership of your property to a living trust with yourself as the trustee for the duration of your life. In addition, you shall specify the beneficiaries who will receive your resources based on your preference. As the ABA says, living trust is a remarkable and highly effective tool that is designed to deal with your assets during your lifetime and after your death. They give you better asset division and distribution and can safely mitigate estate taxes as well as minimize potential challenges to your estate.
Exploring Wills
While a will designates how assets are to be dealt with after death, probate is the process of validating the will and enforcing the distribution of the assets according to the will. Whilst a living trust is aimed predominantly at administering assets through your lifetime, a will comes into force only after your death. Now, if you have a living trust alongside this, it is still necessary for you to have a will to cater to the assets that are not within the scope of the trust.
Writing a will consists of precisely stating how you would like your property to be distributed and loading an executor to administer those proceedings.
Key Differences Between Living Trusts and Wills
A major divide between living trusts and wills lies in probate. Trusts are passed onto beneficiaries without the involvement of the probate courts, and wills have to go through the probate procedures. Assets being held in the living trust can be distributed among the beneficiaries at a quicker time and at a lesser cost.
Besides privacy and the ability to control are the issues that should be well weighed. Trusts allow greater privacy because they are not public documents, and wills can be recorded in public once a probate has begun. With regard to the adaptability and cost, living trusts may be more adaptable in managing the assets but it is mandatory to have an initial cost to establish a trust much like the wills.
Knowing What’s Right for You
Choosing between a living trust and a will involves many considerations. Your living situation, assets, and lifestyle choice are all factors that influence your decision for the arrangement that fits your situation best. In addition, it is imperative to seek professional Oak Brook estate planning attorneys who will help to ensure that your estate plan goes in line with your goals and situation. While the purposes of living trusts and wills are different, they can be complementary to each other. For instance, selecting a revocable living trust as a main avenue of asset management and then having the will to include the rest or make any particular provision is a possibility. Experienced professionals clarify differences and provide better guiding principles.
Final Thoughts
Finally, estate planning doesn’t have to wait until later. Acquiring knowledge on the disparity between living trusts and wills and further engaging the services of a lawyer will supply you with the necessary information to willingly safeguard your assets and provide care for your dear ones.
