Living Trust Vs Will - Which is Right For You
Posted by admin on Feb 7, 2010
Living Trust vs Will is an estate planning question I hear daily in my law practice. These are the two main forms used to accomplish estate planning. Most people have heard of the Will, but in our law practice the Revocable Living Trust is the document of choice. Both get the job of transferring your property done at death but do it in different ways. The main difference is whether your estate will go to court or remain private.
A Will is a formal legal document that tells the Probate Court who gets your probate eligible property. Probate eligible property is owned by a person at their death with no beneficiary designation or co-owner. Having a Will does not avoid probate.
The primary objective of the Living Trust vs Will is to avoid probate and keep you, your family and property out of court. The Living Trust is a separate entity that is created to own and manage property. The creator of the trust, the Grantor, is typically also the trustee, person in control, and the primary beneficiary, in most cases with the spouse and any minor children. The main differences lie in the before and after death administration.
You do very little before death with a Will. Generally you sign it and put it in a safe place. You may also make some beneficiary changes on life insurance and or retirement plans but that is about it. After death is where the work starts. The family will meet with an attorney who will then initiate the probate court proceeding. This court procedure will last approximately eight to fourteen months. There is also a cost associated with the probate. Attorneys can either charge a percentage of your estate usually ranging between 2% - 4% or by the hour with total costs ranging from $4,000 - $10,000 or more.
To contrast a Living Trust, before death is where the work is. After the Grantor signs the trust, he or she must fund it. All probate eligible property must be transferred and titled to the trust. Primary or contingent beneficiaries must also point to the trust. Once this funding is complete, probate will be avoided upon death because the decedent does not own any probate eligible property, it is owned by the trust which continues on. This makes the post death administration much quicker because there is no property transfer required. The successor trustee continues to manage the property for the next set of beneficiaries.
Another great feature of the Living Trust is financial assistance during your life if you become incapacitated. In this case, your successor trustee begins to manage your property for your benefit and can pay your bills. Another court procedure is avoided as no adult guardianship is needed. The Will does nothing for you during your life.
When deciding between the Living Trust vs Will, the living trust is a better choice for most but many people cannot afford the up front costs in attorney fees which range from $2,000 - $5,000. Until recently this initial attorney cost has been a barrier for many but now with the information available on the internet, more and more people are creating living trusts themselves.
By: Robert Olson
About the Author:
Why Do You Need a Living Trust?
Posted by admin on Nov 19, 2009
Another thing that prevents us from taking this step is that most of us simply do not want to think about what would happen if we die or become incapacitated. This type of thought frightens us or makes us feel bad. We do not want to comprehend the fact that we will die some day. But, what will happen to our family? Are there small children in the home? Where will they go? What will happen to them?
These are questions everyone needs to answer and answer as soon as possible. Life comes at us quickly and it ends just as fast. While this is not a pleasant thought, it is something that needs to be discussed and planned for. A living trust can assist an individual in having their desires followed if they cannot answer for themselves. It is also vital that everyone take time out of their busy lives and accomplish a living trust.
Despite the feeling that most of us have that this is over our heads, an individual can obtain the necessary legal documents and forms without a lawyer’s help. They are relatively straightforward and simple to fill out. It is very important for a person to complete a living trust so that their hopes and desires can be realized even after they are gone. The paperwork will normally just take a couple of hours to fill out. Every few months or when things in an individual’s life changes dramatically these documents will need to be updated.
It really is that simple. It will not take long and, thanks to your living trust, your loved ones will not have to figure out your desires when you are gone. Your living trust will settle the estate. Many times when an individual does not have a living trust, or at least a will, the government can take what rightly belongs to their loved ones.
This type of document can assist you with what you would like to accomplish. If you are seriously hurt in an accident, a living trust will assure that you receive exactly the care that you want. An individual may choose not to live on a breathing machine or with a feeding tube for the remainder of their lives. This is important for loved ones to understand the significance of a person’s wishes. Without a living trust your loved ones may be fighting over what they think is best for you when you are not able to speak your wishes.
Instead of the young children winding up with the comfort of a caring relative, they could end up in the state’s custody. No parent would want that for their child. They need to have a living trust to ensure their well-being and others in the family. It is an important step to take at any age. Tomorrow may never come, live for today and protect your family for the future.
An individual is terrified of death or becoming a burden on other people. You can control what happens after the unthinkable occurs. Obtain the paperwork to complete a living trust. It is the most important step an individual can take in their lives. Do not let the state or government be in charge of the future of your family. Finish those papers and put them somewhere safe. After they are completed, talk to family members and let them know what the final wishes and desires are. They need to know what will happen if a major part of the family is no longer around.
As complicated as it seems, establishing a living trust, whether a joint trust or some type of revocable trust, is simple and easy with the forms and software that is available today.
By: Donovan Baldwin
About the Author:
