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've worked hard to accumulate assets during your lifetime, then you no doubt want to make sure they go to the right people once you're no longer around. It's important to document your wishes so that they can be carried out. And wills tend to be a popular estate-planning tool in that regard. But you may want to consider an alternative option -- a living trust.
There are certain benefits a living trust offers that a will doesn't. But it's also important to make sure a living trust is right for you before moving forward.
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What can a living trust do for you?
At the end of the day, both a will and a living trust are tools you can use to pass assets on to your heirs. The process of getting assets out of a will versus a living trust is very different, though.
With a will, your loved ones have to go through probate, which is the process of proving a will's validity. Not only can probate be lengthy, taking many months or even years in certain cases, but it can also be costly. But you can't get assets out of a will without probate.
With a living trust, there's no probate. Upon your passing, the trustee you designate to oversee your trust will distribute your assets according to the instructions you've left. That means your heirs might receive their inheritance much sooner, and that they can be spared the costs of going through a court process.
You should also know that as part of the probate process, wills become a matter of public record. A living trust, on the other hand, gets to remain private. If privacy is something you value, that's reason alone to consider a living trust over a will.
What's the problem with living trusts, then?
At this point, a living trust might seem like a great solution for estate planning. The main drawback, though, is that living trusts can be more complex to set up. And because of this, you may be looking at higher costs than you would with a will.
Of course, the cost of either a will or a living trust will depend on the nature of your estate and how complex it is. It would be silly to try to estimate the cost of putting either document in place without speaking to an attorney first. But generally speaking, you can expect to pay more for a living trust up front.
However, the cost of getting assets out of a living trust may be considerably lower than getting assets out of a will due to the need for probate. So paying more up front could prevent your loved ones from paying more down the line.
Is a living trust right for you?
At this point, you may be wondering if a living trust is your best option for passing along an inheritance. And the best person to answer that question is an estate-planning attorney who can review your circumstances and give personalized guidance.
It's certainly a good idea to educate yourself on the basics of a living trust versus a will so you have a good starting point. But ultimately, it's best to consult a professional who deals with estate planning on a regular basis so you can feel more confident in your decision.
