Jul 27 2010

What is the difference between a will and a living trust?

Category: Law

Answer:

The most important difference between a will and trust is:

  • The documentation required for setup
  • The time at which each becomes effective
  • The costs involved for each
  • The Management of assets

A living trust, upon signing, will immediately give the trust the ability to manage assets and can have several advantages over wills. A trust can avoid costly probate court, reduce estate taxes, and arrange long-term property and asset management. So in essence a living trust is way for one person (trustee) to hold and manage assets for another (beneficiary).

A will is a legal document that allows an individual to allocate money, property, or other assets to designated beneficiaries upon their death. Setting up a will involves selecting an executor, who will carry out your wishes as set forth in the will. A legal process called probate is activated upon the death of the individual and the executor is granted the right to disperse the estate.


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