The majority of people are familiar with wills when it comes to estate planning. A will is a legal document that specifies the distribution of your possessions upon your passing. But many people fail to see the advantages of creating a living trust. A living trust is a distinct legal entity that manages your assets while you are still alive and establishes how they will be distributed after your death. A living trust can have other benefits that are worth taking into account, even if a will is still a necessary component of any estate strategy. Knowing about living trust vs will is important in this case.
Steer clear of probate
Avoiding the probate process is one of the main reasons people decide to set up a living trust. The distribution of assets to beneficiaries once a will is filed for probate may take months or even years. Legal fees and other expenses may be incurred by your estate during this period. Assets retained under a living trust, on the other hand, avoid probate and can be distributed to your beneficiaries more quickly and effectively. This preserves the value of your estate while also saving time.
Preserving Privacy
The seclusion that a living trust offers is still another important benefit. Once they go through probate, wills become public records, making your estate’s specifics—including your assets and beneficiaries—accessible to everybody. Contrarily, living trusts are kept secret and shielded from public scrutiny. People who want to keep their financial affairs private may find this confidentiality especially alluring.
Adaptability and Command
Additionally, living trusts give you more freedom and control over your possessions. You can only specify what happens to your assets when you pass away with a will. A living trust, on the other hand, gives you the ability to control your assets while you are still living. In addition to deciding how your assets should be handled in the event of your incapacitation, you have the ability to add or remove assets from the trust. This guarantees that your desires will be carried out both while you are alive and after you pass away.
Tax Advantages
Living trusts can aid in inheritance tax planning even though they don’t offer any direct tax benefits. Certain living trust arrangements can be set up for high-net-worth persons to reduce estate taxes and increase the amount of money left to heirs. You can customize your estate plan to handle particular tax issues and guarantee a better outcome for your beneficiaries by using both a living trust and a will.
In conclusion
In summary, even while a will is an essential part of estate planning, it is frequently insufficient on its own. Probate avoidance, privacy preservation, flexibility, and tax planning assistance are just a few of the many advantages that a living trust can offer. It makes sense for people who want to draft a thorough estate plan to take into account both a living trust and a will. You can choose the best course of action to suit your particular circumstances and safeguard your legacy by speaking with an estate planning lawyer.