Among the most important estate planning documents are Wills and Trusts. Please continue reading and reach out to a competent Rochester estate planning lawyer to learn about how a Will and a Living Trust differ and how our legal team can help. Here are some of the questions you may have:
What Is a Will?
A Will is a legal document that outlines how a person’s assets should be distributed after their death. Importantly, it must go through probate, a court-supervised process of authenticating the Will. This ensures the Will’s authenticity and the proper distribution of assets by the appointed Executor. Additionally, a Will may nominate a guardian for minor children, a feature unique to this document. However, the Surrogate Court Judge of the County where the Will is probated must approve the guardian named.
What is a Living Trust?
A living Trust is a document which you can create during your lifetime. Because it is effective immediately upon creation, it contains provisions which provide for the disbursement of your assets at your death. Use of a Living Trust, if properly funded, can eliminate the need to probate your Will at your death, offering a faster, more private transfer of assets after your death. Just like a Will, a Living Trust can also specify conditions under which beneficiaries receive assets, such as requiring that they reach a certain age.
What Are Their Key Differences?
Some of the primary differences between Wills and Living Trusts are as follows:
- Probate Avoidance
- Wills: The probate process can be lengthy and costly, often taking months or even years to resolve. During probate, a Will becomes a matter of public record, which means anyone can access the details of the estate, including asset values and distribution, and the identities of beneficiaries. This lack of privacy can be a concern for many. If you have assets, specifically real estate, in more than one state, your Will may need to be probated in not only the state you reside, but any other state in which you own real estate. This can drastically increase the cost of probate.
- Living Trusts: By avoiding probate, Living Trusts offer a more streamlined and private means of asset distribution. This not only keeps personal and financial matters out of the public eye but can also reduce the time and expenses associated with distributing assets. Living Trusts are especially beneficial in complex situations, such as owning property in multiple states, which would otherwise necessitate multiple probate proceedings.
- Control Over Assets During Life
- Wills: Wills only become effective at a person’s death and provide no fiduciary appointment or asset protection during life.
- Living Trusts: Living Trusts can provide a trusted successor to manage your financial assets if you become incapacitated before death. For those assets held in Trust, a successor Trustee that you name in the document, can take control and manage the Trust property if you have a significant medical issue, cognitive impairment or physical infirmity. This can minimize the disruption on you and your family in such an emergency. Additionally, some forms of Living Trusts can be created to shield some of your assets from the tremendous costs of long-term care.
- Guardianship
- Wills: One of the most critical aspects of a Will is the ability to nominate a guardian for minor children. This ensures that your preference for guardian of your children will be taken into consideration when the Court appoints a guardian.
- Living Trusts: While Living Trusts manage assets for beneficiaries, including minors, they do not have the authority to designate guardians for the personal care of children. Parents must use a Will or another legal document to address guardianship of minors.
Estate planning embodies more than just the distribution of assets; it’s about peace of mind and ensuring that your wishes are honored. Whether a Will or a Trust better serves your needs depends on your personal circumstances, including your assets, your desires for those assets after your passing, and the needs of your beneficiaries.
Engaging with a knowledgeable estate planning attorney is invaluable. Your lawyer can provide tailored advice that aligns with your specific situation and goals.
If you have further questions or are ready to begin crafting your comprehensive estate plan, please don’t hesitate to contact Lacy Katzen LLP today.
