Choosing how to set up your estate plan can be confusing. One of the most common areas of confusion concerns wills and living trusts. Some people may tell you that you need one, while others say you should choose the other. Others recommend you use both. Let’s look at some of the differences.
Living trusts do not go through probate
One of the key advantages to a living trust is that assets you place in it will not pass through probate. You can transfer them to your family on death quicker than through a will. However, you may prefer the security of knowing a will passes under the watchful eye of a judge. When you create a living trust, you rely entirely on the honesty of a trustee.
Living trusts remain private
The public can access details of a will that passes through probate. By contrast, assets transferred through a living trust will not be made public.
Wills can cover more details than a living trust
Estate planning is not only about transferring assets on death. Using a will allows you to make clear your health care wishes. You can also specify guardianship for your children or how your would like your funeral to be.
Many people find they can suffice with only the will. These are cheaper and easier to set up than living trusts. Those who create a living trust often choose to use a will as well.
Seek advice to understand more about the differences between these two estate planning tools. Think of your estate plan as a recipe. Choose the ingredients you need to achieve the outcome that you desire.