Estate planning is an important process for ensuring that your assets and property are distributed according to your wishes after you pass away. One option for estate planning is to create a living trust, which is a legal document that allows you to transfer ownership of your assets to a trust while you are still alive. In this article, we will discuss the benefits of a living trust over a will for estate planning.
First, it's important to understand the difference between a will and a living trust. A will is a document that directs how you want your assets to be distributed after you pass away. It becomes effective only after you pass away, and it must go through probate, which is the legal process of having the will admitted by the Surrogate’s Court so that the executor in the will can collect and distribute the assets. On the other hand, a living trust is a legal document that allows you to transfer ownership of your assets to a trust while you are still alive. After your passing, the trust is managed by a trustee, chosen by the client, who is responsible for managing the assets and distributing them according to the terms of the trust.
One of the main benefits of a living trust versus a will is that it avoids probate if properly funded. Probate can be a time-consuming and costly process, as it involves going to court and getting a judge's approval for the distribution of your assets. By transferring ownership of your assets to a living trust, you can avoid this process and ensure that your assets are distributed according to your wishes without the need for court intervention.
Another benefit of a living trust is that it can provide for the management of your assets if you become incapacitated. If you become unable to make decisions for yourself due to illness or injury, the trustee of your living trust can step in and manage your assets on your behalf. This can be especially important if you have minor children, as the trustee can ensure that their financial needs are taken care of if you are unable to do so.
A living trust can also provide for greater privacy. Because a will must go through probate, it becomes a matter of public record. This means that anyone can view the contents of your will and see how your assets are being distributed. On the other hand, a living trust remains private, as it does not go through probate and is not a matter of public record.
Additionally, a living trust can be more flexible than a will. With a will, you can only distribute your assets after you pass away. However, with a living trust, you can specify how your assets should be distributed at any time, including while you are still alive.
Finally, a living trust can be easier to update than a will. If you want to make changes to your will, you must create a new will or create a codicil, which is a legal document that amends your existing will. This can be a complicated process, and it's important to make sure that the changes are properly executed and witnessed by two disinterested witnesses. On the other hand, a living trust can be updated by modifying the terms of the trust through an amendment which is notarized, as opposed to witnessed.
In conclusion, a living trust can provide several benefits over a will for estate planning. It can avoid probate, provide for the management of your assets if you become incapacitated, offer greater privacy, be more flexible, and be easier to update. While both a will and a living trust can be useful tools for estate planning, it's important to carefully consider your options and choose the one that best meets your needs.
For help planning your estate contact the Law Offices of Roman Aminov, P.C. at 347-766-2685 for a free consultation to discuss your matter.
