Will And Living Trust Differentiated

The Differences Between A Will And Living Trust

Many people are confused as to the differences between a will and a living trust. However, the differences are huge at times, and very minimal at others. In order to truly grasp the concepts of how they are different you must understand what they both are. A will and living trust are ultimately your wishes of how you want your property, and assets handled in the event of your death. Beyond this, there are some very major differences in how they are handled.

When you use a will, you simply write out all of your property and assets, and whom you desire each piece of property to go to. This is generally suitable for personal possessions, such as heirlooms, a record collection, art collection, pets, and even your home and bank accounts. A will determines upon your death exactly who will receive what. It someone is not specifically listed in your will as receiving a specific item then they will receive nothing at all. In order to object to what has been laid out in a will, it is necessary to petition the courts and prove you have a valid claim to a specific piece of property that was given to someone else in the will.

This is why some wills take many years to resolve, because of the disputes. In order to help reduce the friction and stress that can be caused by contesting a will, many people searched for a more effective method. What has resulted is the creation of a living trust. A living trust varies from a will because the trust is created before the death of the owner of the property. So while a will distributes property upon death, property is moved from individual ownership, to the ownership of the trust before death occurs.

Some people are not suited for the complexity of a trust, and it is recommended that you only consider a trust if you have more than $100,000 in assets, or if you own substantial amounts of real property, such as real estate, or a very valuable collection of some sort, such as cars, or art. If you have very few expensive possessions, or very few assets then a will is the better option because they are much cheaper, and easier to set up and handle. When determining the best option for you, you should always speak to an attorney for a definite answer regarding your individual situation.

When you consider that in a will, you are leaving no one person specifically in charge of everything you can see how a will can create some fights and arguments. However, a living trust requires you to find a trustee whom you can trust. The trustee is the person who manages the trust. Their job is to follow your wishes in how matters are handled, from the purchase of property, to the transfer, to the distribution of proceeds from a sale, interest payments etc. All of those matters and more are handled by the trustee.

Most states have specific rules, guidelines, and laws in which a trustee must abide by in order to remain a trustee. If the rules, guidelines or laws are broken, the trustee can be punished in criminal court, as well as another trustee appointed to replace the previous trustee. The trustee is responsible for distributing the proceeds of the living trust in the exact manner that you have outlined in the documents to the beneficiary. Whether the beneficiary is one person, or several.

As you can see, the differences are quite large between a will and living trust. Finding the correct method for you can be very confusing at times. Taking care of your family is a very large and complicated job, but using a will and living trust, you have the tools you need in order to protect them and yourself effectively and quickly.