Will and Trust - Living Trust
A will and trust are estate planning devices to transfer assets at the time of death as well as a living trust that allows control over the trust's assets during your lifetime.
A will and trust provides instructions about what to do with your property at the time of your death. If there are minor children the will and trust deal with who should be their guardian. If you die without a will, the state and courts decide what to do with your property and children. A will and trust should be updated when there is a change in your life circumstances, such as a divorce or the birth of a child.Trusts are practical estate planning devices when minor children are involved. A trust can be crafted to continue after your death and until the minor children reach an age you decide upon or until the education of the minor children is complete. A trust can also help in planning for the elderly. It is possible that an elderly person may reach a stage in their life when they no longer can manage their assets. The trust could be structured to care for the elderly person when they become incapacitated without the need for the court to appoint a conservator.
The purpose of a living trust is to hold your assets, usually under your control, during your lifetime and to distribute those assets at your death. The principal advantage of a living trust vs will is that a living trust avoids the cost and time of probate. A living trust comes into effect when it is funded with assets such as a bank account, stocks or real estate. The trust's grantor can serve as a trustee during his/her lifetime. There is also another trustee named to follow the terms of the trust after the grantor's death.
Deciding between a living trust versus will depends upon your personal circumstances. It may be that you want to control your assets as long as you are able and to have a trustee appointed during your lifetime who will take over the management of those assets at a designated time or upon the occurrence of a particular event. A living trust allows you to control your assets during your lifetime and thereafter for a trustee to take over the management. With a will, if you want to have your assets managed after death, a conservatorship would have to be set up along with a power of attorney. The between difference living trust will is also cost. It costs more to set up a trust than prepare a will but the costs of probating a will are more than a living trust because the living trust does not need to be probated.
Another difference a living trust vs will concerns out-of-state real estate. Under a will, if there is out-of-state real estate it must be separately probated in that state. With a living trust there would be no out-of-state probate process.