Its Finally Time to Learn the Difference Between a Will & a Living Trust

One of the most common questions I get asked is about the difference between a will and a living trust. While both are important estate planning tools, they serve very different purposes and have distinct advantages and disadvantages.

A will, also known as a last will and testament, is a legal document that outlines how your assets will be distributed after your death. With a will, you can name an executor to manage the distribution of your assets and guardians for your minor children. A will also allows you to make specific bequests, such as leaving a specific item of property to a specific person.

A living trust, on the other hand, is a legal arrangement in which a trustee holds and manages assets for the benefit of one or more beneficiaries. Unlike a will, a living trust is created during your lifetime and can be revocable or irrevocable. Revocable trusts allow you to retain control over the assets during your lifetime and make changes as needed, while irrevocable trusts cannot be altered once they are created.

One of the key advantages of a living trust is that it can help avoid probate, the legal process by which a will is proved valid and assets are distributed. Depending on which state you live in, probate can be a lengthy process, and a living trust can help your assets pass directly to your beneficiaries without the need for probate.

A notable disadvantage of a living trust is that you must re-title all of your assets so that they are owned by the trust rather than you individually. This can make managing those assets a bit more complicated and cumbersome during one’s lifetime.

On the other hand, a will is simpler and more affordable than a living trust, and it does not require ongoing management or maintenance. Also, making changes to a will during your lifetime is a much simpler process than amending or revoking and restating a living trust. While a will does require probate, many states (including New York) have a simple and straight forward probate process which can typically be completed within a few months.

In short, both documents are effective and important estate planning tools. The best way to determine which one is right for you is to consult with an experienced attorney about your specific needs and goals.