While both a last will and living trust transfer property when you die, they have different uses. It is important that you understand these differences before deciding to set up a living trust. A Bryan probate lawyer can advise you on which may be best suited for your needs.
Living Trusts and Last Wills Compared
A living trust can be much more cost-effective in the long run. This is because it allows for the avoidance of probate court, which can take a considerable amount of time and money. Initially, however, a will is much less expensive and complex to create.
Among the advantages of a living trust are:
- Your privacy is protected in a living trust. When a will is probated it becomes a matter of public record.
- Ownership of property in another state is a much simpler matter with a living trust, for you otherwise will have to probate the property in that state.
- If you become incapacitated a living trust can provide for transfer of managing your affairs to another designated individual. Otherwise the matter must be taken up in court and a guardian appointed.
Living trusts also have distinct disadvantages. These include:
- The initial cost of setting up a living trust is much greater that creating a will.
- If at some point you wish to refinance property that is included in the living trust, you may have a difficult time doing so.
- When you create the living trust, property that is included is no longer technically owned by you, but by the trust.
- When you create a will, you can set up a final date after which creditors cannot bring a claim against your estate. With a living trust such a final date cannot be arranged, and therefore the trust will be left exposed to liability.
- You are not able to arrange for guardianship of minor children in a living trust. With a will you are able to do this.
If you do decide to create a living trust, it is important that you also set up a pour over will. This document will arrange for the disposition of any property that is not included in the living trust.