Estate planning is a major concern of many Americans in Tennessee and across the country. However, according to the AARP, nearly 60% of Americans lack any sort of estate planning whatsoever. This can lead to serious legal snarls after death or maybe even before it. If you are looking to finally take the plunge and set up your own estate, it is important to know the difference between a living trust and a will.
Most people are more familiar with what a will is. A will is essentially a legal document that dictates what will be done with your property and assets after your death. Wills can also be altered during any point you are alive.
On the other hand, a living trust goes into effect while you are alive. For example, if you end up medically incapacitated, a living trust can dictate what is and is not done with your property and assets.
So, which one is better? The answer is that it depends on your circumstances. Living trusts are advantageous in that they do not go through probate, and they are especially important if you happen to own property that is outside of your state of residence. Plus, a living trust is not made a public record, unlike a will.
However, a living trust can be more expensive to be set up and will require active maintenance. Plus, you will need to fund the living trust before your death, otherwise, it will be useless.
This post is intended to educate you on the difference between a living trust and a will. It is not intended to be legal advice.