There are numerous things in your future to think about when heading into retirement. Have I saved enough? How much will my medical insurance cost? Are all my affairs in order financially? Will my children and grandchildren be alright if something happens to me? And most of all, what I am going to do with all of my time? That last one is the best. In all seriousness one very important way to ensure your wants are documented is by having a will, so most of us think. First, let’s take a look at what a will and a living trust is.
will v. living trust
A will is a legal document by which a person, the testator, expresses their wishes as to how their property is to be distributed at death, and names one or more persons, the executor, to manage the estate until its final distribution. A living trust is a three-party fiduciary relationship in which the first party, the trustor or settlor, transfers property upon the second party for the benefit of the third party, the beneficiary. In short, they are very similar. They main differences are; a living trust is not conducted in probate court, and a will allows you to appoint an executor or guardian to take care of your children. So why may a living trust be a better option for you rather than a will?
The cost is much less
Probate costs can be very expensive. Bond fees, appraisal fees, court fees among others are all billed at an hourly basis. Depending on how lengthy your will is, which can be influenced by amount of property and number of children, only means more time inside the court rooms.
Your records are kept private
Probate is a public process. Meaning that anyone who could have a claim to your estate can can argue the court for that right, even distant relatives. However, trusts are private, allowing you to maintain more direct control over who receives what and who knows about this once you pass.
They are harder to dispute
Considering living trusts are not conducted inside a probate court, arguing the contingencies are much harder. Let’s say you have five children. If you want to disperse different amounts to each, you can. However, if one is unhappy about that they have the right to petition. With a will it is much easier for the one making the petition. A living trust is more set in stone.
Provides lifetime property management
A living trust allows you to actively manage it yourself. God forbid if something happens to you and you are incapacitated, the living trust will speak for you. A will is only valid after the time of death.
Your children are grown
One of the drawbacks with a living trust is that you cannot appoint guardianship to another individual for your children. When your children are young, this can be deterring. However, once they are grown up and wouldn’t need an appointed guardian this is inapplicable to you.
Everyones situation is different. Please consult a licensed attorney to discuss which option is better for you and your family.
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