Before we
discuss the differences between wills and living trusts, let's look at their
most important similarity. Both a will and a living trust allow you to set the
terms for the distribution of your property after you die. The differences
between the two, however, can be quite important. Before deciding which to use
for your property you should consider the following advantages and
disadvantages:
|
ADVANTAGES |
DISADVANTAGES |
Living Trust |
•
A living trust is a cost-saving device: in most states, it allows you to
avoid the expense and delay of probate proceedings, which can take up to
3 years to complete and eat up 10% of the value of your estate. |
• Setting up the trust requires quite a bit of initial paperwork and can
be expensive. |
Will |
• Setting up a will is much simpler and less expensive than setting up a
living trust. |
•
Upon probate, a will becomes a matter of public record. |
If you choose to create a living trust, you should also create what is called a pour-over will. It provides for the distribution of any property that is not included in the trust. It will also allow you to name a guardian for any minor children.