When it comes to estate planning, two common options are a will and a living trust. Each has its unique features and benefits, making it essential to understand the differences to determine which is best suited for your needs. This blog will compare and contrast some of the differences between a will and a living trust.
Wills: A Good Start….
A will is a legal document that outlines how your property and assets will be distributed upon your death. While having a will is better than having no plan at all, its effectiveness is somewhat limited, especially in California.
⛔️Wills must go through probate, a court-supervised process that can be lengthy and expensive, often taking 18 to 24 months to resolve. This means your loved ones may face delays in accessing their inheritance.
⛔️Additionally, the probate process is a matter of public record. This means that anyone can access your will and see how your assets are going to your kids.. In some cases, a judge may make decisions about your estate instead of you. The result may not be what you wanted.
Setting up a will is relatively straightforward, requiring minimal legal formalities. However, a significant drawback with a will is that if you have minor children, they will receive their inheritance in a lump sum when they turn 18, with no oversight or control over how they manage that money. This could lead to potential mismanagement or squandering of funds at a critical time in their lives. Even worse, predators and creditors can potentially prey on your kids when they receive the lump sum.
Living Trusts: A Gift from The Law Gods
The primary advantage of a living trust is that it allows you to avoid probate entirely.
✅If you own real estate, a living trust is especially beneficial, as it enables you to control how your property is passed on without the lengthy probate process and the significant Probate costs and fees in California which can easily add up to tens of thousands of dollars. This is crucial for ensuring your loved ones get as much of your estate as possible (not the State of California) and that your wishes are honored promptly after your passing.
✅Living trusts offer unparalleled flexibility, allowing you to design a tailored outcome for your loved ones. Because they bypass probate and are not public records, your affairs remain private, sparing your family from unnecessary scrutiny. Upon your death, the transition of assets to your heirs occurs much more quickly and efficiently than with a will, and according to your wishes.
✅Living trusts are particularly useful in blended families. They provide a way to ensure that your assets are distributed according to your wishes, which can help prevent disputes among family members. They also offer greater protection for minor children, as you can specify how and when they will receive their inheritance, often including stipulations for their care and education.
✅Additionally, living trusts can facilitate clear giving programs to charities, allowing you to leave a lasting legacy while providing for the causes you care about. In California, the legal environment is favorable for establishing living trusts, making it an excellent jurisdiction for effective estate planning.
Unsure which option is best for your specific needs? Contact an experienced Estate Planning Attorney Today
Wills and living trusts serve essential purposes in estate planning, they come with distinct advantages and disadvantages. Wills may be simpler to set up and are better than no estate plan, but can lead to very costly and public probate proceedings and severe unintended outcomes after you pass. In contrast, in California living trusts can save your loved ones many tens of thousands of dollars, and offer flexibility, privacy, and efficiency, making them an attractive option for many individuals, particularly those with real estate or minor children. When considering your estate plan, it’s crucial to evaluate your specific needs and consult with a legal professional to determine the best approach for you and your family. Contact the offices of Lavelle Law Group and speak with an experienced estate planning attorney by clicking below.