Did you know that 67 percent of older adults have no estate plan in place?
A lot of people make the mistake of procrastinating on this critical issue and only make the decision when something happens.
Are you worried that you’ll be in a position where you’ll have to make a quick decision? Don’t worry; there are options.
By getting a trust plan in place, you can ensure that your wishes are followed. To help you decide on the right option, here is a comparison between a living trust vs will.
What Is a Living Trust?
Living trusts are a trust set up when two people decide they want to share power and responsibility over their money. A living trust gives each person the right to manage their own money and the ability to pass on control of their assets to future generations. This can be helpful if one person dies without leaving a will or if one wants to avoid probate.
The cost of a living trust can vary depending on the state in which it is created, the type of trust, and the attorney who will be helping to create it.
What is a Will?
A will is a legal document that sets out the instructions for how an estate should be managed after someone dies. It can be helpful if you have questions about your estate’s assets after someone dies or if you want to distribute an inheritance more evenly. But there are also other purposes for wills, such as helping to protect the privacy of someone who leaves behind essential documents.
The Benefits of a Living Trust vs Will
When it comes to estate planning, many people think about will vs living trusts. Both are important, but some benefits come with a living trust over a will.
Some benefits of a living trust include it allows you to pass on your wealth to your loved ones in an untraceable and tax-free way. It can allow you to invest your money in a more diversified manner, which may help reduce the risk of it ending up in the wrong hands. Find more information here.
There are many benefits to having a will as well, including helping to protect your assets if you die suddenly, providing for your loved ones if you can’t manage them on your own, and choosing who gets your estate when you die.
Here’s a list of some of the most common reasons people make wills:
- To start or end a family
- To create insurance or property titles
- To clear up any debts related to an earlier relationship
- To change how intestate succession works (if you’re married and have kids)
- To establish joint custody or visitation rights between parents or children
When stating differences between a living trust vs will, a living trust is a trust that is created when two or more people agree to create a trust to ensure that their properties will be distributed as they wish. A will is a document that lists who will have what property when they die.
A living trust offers many advantages over a will, such as being easier to create and maintain, providing greater legal certainty for those involved, and less likely to conflict with other interests.
If you want to read more information and guides about financial planning, please browse through the rest of our blog today!