When people want to create an estate plan, there are many different tools that can allow them to do so. Most often, they only have a vague understanding of what these are and how they can benefit an estate plan. This is usually the case when discussing the difference between a will and a living trust. While they both help to protect and transfer assets, they both serve their own purposes. Continue reading below to learn more and contact an experienced California estate planning attorney for guidance during this process.
What is a Will?
There are four main purposes of a will in an estate plan. This includes the following:
- Gives instructions on how assets and property should be distributed upon a person’s death
- Names beneficiaries
- Allows a person to choose an executor to oversee the distribution of their assets
- Allows a person to choose a guardian to finish raising their minor children
When a person dies, their will goes into effect. It is important to note that it does not cover any property that is held in a trust or joint tenancy. Instead, it covers all property that is in their name only. In order for the will to be carried out, it has to go through probate first. This is a legal process in which the court makes sure the document is valid, outstanding debts are paid, and all assets have been appraised so they can be distributed.
What is a Living Trust?
When a trust is created, it establishes a legal relationship between a person, known as the trustee, and another individual who inherits the trust, known as the beneficiary. The trustee holds the property or assets on behalf of the beneficiary. A living trust allows a person to manage their assets before and after death. This holds assets and defines how they are to be distributed upon death. The trustee is allowed complete control of their assets and can move them as they wish.
What is the Difference Between a Will and Living Trust?
There are a few differences between a will and a trust. This is as follows:
- A will does not go into effect until you die while a living trust takes effect as soon as it is created
- A living trust allows you to bypass probate
- A living trust ensures privacy while a will is a public document
- Living trusts are generally more expensive to set up than a will
Contact our Firm
Working with an experienced estate planning attorney, such as Jaci Feldman of the Woodland Hills, California, Law Office of Yacoba Ann Feldman, will ensure that you are taken care of when you need it most.Contact The Law Offices of Yacoba Ann Feldman to schedule a consultation today.