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Guilherme Mazui

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What is the Difference Between Will and Living Trust?

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The main differences between a will and a living trust are when they take effect and whether they go through the probate process. Here are the key differences:

  • Will: A will is a legal document that provides instructions on how to distribute property and assets after death. It goes into effect only after the testator dies and must go through probate, which is a court-supervised legal process needed to validate the will. Probate can be costly and time-consuming, and the proceedings are part of the public record. A will allows you to name guardians for minor children or dependents, designate power of attorney, and outline end-of-life wishes.
  • Living Trust: A living trust is a legal arrangement that allows you to transfer ownership of property and assets to a trust while you're alive. It is managed by a third party and distributed to beneficiaries at any time determined by the creator of the trust. A living trust takes effect immediately upon signing and funding it. It bypasses probate, which preserves privacy and can save time and money. However, a living trust doesn't provide the opportunity to name a guardian for minor children or dependents, designate power of attorney, or outline end-of-life wishes.

You can have both a will and a living trust, as they serve different purposes. A will is generally better for those with simpler estates, while a living trust is more suitable for those with complex estates, multiple properties, investment accounts, and sizable assets. It's essential to assess your situation, goals, and needs to determine which option or combination of options is best for you.

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  • What is the Difference Between Will and Living Trust?
  • Comparative Table: Will vs Living Trust

    • Comparative Table: Will vs Living Trust

    Here is a table comparing the differences between a will and a living trust:

    Feature Will Living Trust
    Definition A legal document providing instructions on distributing property after death. A legal arrangement transferring ownership of property, managed by a third party, and distributed to beneficiaries at a determined time.
    Effectiveness Takes effect after death. Takes effect when signed and funded, often while the person is still alive.
    Probate Goes through probate, a court-supervised legal process to validate the will. Avoids probate, preserving privacy and reducing costs.
    Guardianship Provides guardianship for minor children. Does not provide guardianship.
    Integration Requires a pour-over will to integrate a living trust and a will in an estate plan. Can be integrated with a will if needed, but generally not required.
    Complexity Straightforward process. More complex process with more paperwork.
    Asset Management Assets distributed after death. Assets managed according to the trust's terms, often providing more control over their distribution.

    Keep in mind that a living trust is generally more expensive to set up than a will but can provide additional benefits, such as avoiding probate and offering more control over asset distribution. Depending on your estate planning needs, you may choose to have both a will and a living trust as part of your plan.

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    Guilherme Mazui

    Guilherme Mazui is graduated in journalism from the Federal University of Minas Gerais (UFMG) and a master's degree in Communication from the University of São Paulo (USP). In addition, he has experience in advertising writing and has worked as a content editor in several companies.