Do You Need a Living Trust, a Will, or Both?

create-a-free-will-onlineMany people don’t really enjoy thinking about their impending passing from this earth, which means that questions about wills, trusts, and estate distribution can be disconcerting.

Still, it’s smart to consider what will happen to your estate and your sentimental belongings at your passing.

Keep in mind that the more you prepare for that time of your life, the more you express your care for those you love; leaving them without making your wishes known can leave them bewildered, confused, and upset.

Take control now.

A will and/or trust ensures that your belongings go to the people you choose.

If you do not have a will in place, the court will appoint someone to distribute your assets — both the big ones (like your home) and the little ones (a sentimental pair of earrings or a watch, for example).

Most of us would rather make those choices ourselves.

A Will, Trust, or Both?

Should you prepare a will, or a trust, or both? Perhaps defining each of them and comparing the two will help.

What is a Will?

A will is a written legal document that allows you to distribute your property as you wish upon your death. You can:

  • Select beneficiaries of your property
  • Choose someone to execute your wishes
  • Receive court supervision to assure that your “executor” follows your guidelines.

Keep in mind that a will becomes public information once you pass. They are subject to probate proceedings should it become necessary (which can be very expensive).

If you have children, you will name a guardian for your children if you pass away. Interestingly, there is nothing automatic about this named guardian; the court still must affirm your nomination or reject it — although rejection of your selected guardian rarely occurs.

A will is almost always less expensive to prepare than a trust. A will is done when it is done — requiring no further action or involvement on your part.  A trust, however, morphs as your life unfolds.  The trust will be funded and developed while you are alive; so the ongoing work brings about ongoing expenses.

What is a Trust?

A trust is just a different way to transfer your property upon your death. Some consider it an “alternative method” to a will. The trust differs from the will in that you manage your estate while you are living; a will manages your estate when you pass.  With a trust, you have a trustee (yourself or someone you name if you are no longer willing or able) who manages your property according to your wishes. An attorney can help you weigh the pros and cons of both; and then, assist you in creating the legal document that you choose.

Why Do People Choose a Trust Over a Will?

  • Living trusts are not subject to probate proceedings.
  • No court supervision is provided (or needed) should benefits be challenged or disputes arise. All defers to your successor trustee.
  • Trusts are private matters — not open to the public.
  • You continue to manage the assets in your trust as long as you are alive and of a sound mind.
  • Should you lose the mental or physical ability to manage your trust, you name a “successor” to do so for you.
  • There will be no probate costs if all of your assets are held within the trust.

Keep in mind that trusts cost more than wills to prepare because they are ongoing and developing over your lifetime; you will be funding the trust and managing it along the way, rather than simply writing up a will and being done.

Since a trust is something that you establish during your living years, it can also bring you benefits while you are living.

Over time, you will continue to transfer all of your estate into your trust.

And, you can arrange that, upon your death, any assets not within the trust at that time can be transferred. This will keep your property out of probate court.

The Bottom Line

You should choose at least one. If you die without a will or a trust, the state will gain control of your assets and will distribute them as it sees fit to a surviving spouse and/or your closest relatives. This completely removes you from the picture, and you may not like the results.

Many Choose Both

Go ahead. Create a will. Include a trust within that will if you’d like. The goal here is to make sure that at the end of the day, all of your assets go to those you love rather than become the property of the state.

How to create a will online for FREE and in less than 10 minutes - http://christianpf.com/living-trust-will/...Many people don't really enjoy thinking about their impending passing from this earth, which means that questions about wills, trusts, and estate distribution can be disconcerting. Still, it’s smart to consider what will happen to your estate and your sentimental belongings at your passing. Keep in mind that the more you prepare for that time of your life, the more you express your care for those you love; leaving them without making your wishes known can leave them bewildered, confused, and upset....

If you have children, you can include a trust within the will that sets up instructions for how and when your minor children get what they need.

If it costs a little more to do a trust or a will and a trust, so be it. Your family will be blessed by your attention to details during a time of grief.

How to create a will in less than 10 minutes and for FREE!

I created my will at RocketLawyer a couple years ago and it was a very quick and easy process.  And if you follow a couple simple steps you can do it completely FREE!

Basically they charge a monthly fee of $39.95 to use their legal forms, but they offer a free 7-day trial that allows you to cancel at anytime.

So just go create your will and then make sure to cancel your account within a week and you won’t pay a dime!

 

Are you going to set up a living trust or will? Perhaps both? Leave a comment with your reasons!

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4 Comments
  1. ron

    Can a person develop their own living trust by using the Alpha Living Trust Kit by Kermit Burton. Opinion please. we have investments, land several houses, etc. God bless and keep you.

  2. Sandra

    The privacy issue is what made me press my husband to have a Living Trust made. Where we live, the lil’ ole blue hairs would meet for bridge in the mornings, go “downtown” to eat lunch and then, for afternoon entertainment, they’d go to the Courthouse and read the most recent wills submitted for probate. This was a weekly event! It was, and is, very important my personal business remain private and a will is NOT private…it can be read by anyone who wants to go to the Courthouse and read it, at no cost or fee. Not so a Living Trust; once it’s made, it’s private and one cannot be made to submit it for anyone else’s perusal.
    We made both Will’s and Trusts; the Will has a “pour over” clause where, upon death, everything pours over into the trust and death renders one without earthly goods. Thus, there’s no inheritance or death tax to pay…another huge, legal, benefit.

  3. constance

    I would probably go for the trust maybe due to privacy involve with it, my sister inlaw passed away with no will or trust we had to appoint someone within ourselves which was not great since I ended up inheriting a minor child while I had no parenting skills

  4. Michelle

    I am so glad you posted this. I was just talking to my sister about this, since she has a one year old daught.er. Thank you for posting, I will be sure to pass this along!