This article is intended for educational purposes only and is not legal advice. For guidance on your personal situation, please contact a lawyer.
If you're at the point in your life where you're seriously looking at your final wishes, you may well find yourself deciding whether to use either a living trust or a will as the main vehicle for distributing your assets when the time comes.
There are some differences. A living trust is created while the grantor -- in this case, you -- is still alive. It's a legal arrangement that designates a trustee to manage the assets for beneficiaries, which can include you, by the way.
A will, meanwhile, is a legal document that lays out the final wishes of the testator -- thus "last will and testament" -- and names an executor to carry out those instructions after your passing.
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Here are three key advantages of a living trust to consider.
Avoid the cost and delays of going to probate
Probate is the court-supervised process of distributing assets after someone dies. Living trusts make it easier to transfer the assets to your beneficiaries, as they typically don't go through probate. Wills often end up in probate. That can be time-consuming and costly, especially if it's contested.
Flexibility for your living days
A revocable living trust provides flexibility for you to change your mind as circumstances warrant, until you can't. A good example is including your home as an asset with you as the beneficiary. You can specify your right to use the property, including living in it or selling it, as long as you're alive.
Keep it among yourselves
Living trusts are legal documents, but they are not public information. Probate records are public records, and the details of your estate -- including who gets what -- can become common knowledge. Don't want that? A living trust restricts that knowledge to your named beneficiaries and the legal experts who helped you craft the document. And please do use an experienced tax/estate attorney who can assess your unique situation and guide you away from pitfalls.
The bottom line for your top wishes
There are potential tax benefits of living trusts, too, that should be discussed with your attorney so you understand all the implications. Bottom line: A thoughtfully prepared, thoroughly vetted living trust can help ensure that your unique set of assets and final wishes are handled as you wish, privately, to the benefit of your heirs and the causes that matter to you most.
