Trust Versus Will
Living Trust Vs Wills
When it comes to your future and how to protect you and your loved ones, knowing what fits your needs is the greatest protection. As an estate planning law firm in Arizona, Phelps LaClair is here to help. When legal concepts can seem difficult and feel overwhelming, we want to demystify them. Both a will (sometimes called a “last will and testament”) and living trust are used to pass on assets or property following a person’s death. They are both effective in providing benefits through asset protection plans, but have different procedures. The terms trust and will are often intermixed and misused, so let’s dive into what each are and how they can benefit you.
A Living Trust
A living trust, in its simplicity, is a document that is put into effect while the trust maker (or “trustor”) is alive, and is focused on what steps should be followed in regards to property and assets, in the case of disability or death. This is a document that protects you and your loved ones from Arizona laws that would otherwise require probate.
A living trust…
- takes effect as soon as the document is signed by the person setting up the trust, the trustor;
- can be changed up until a person’s death, or as long as they are mentally competent;
- avoids probate and avoids property from being inherited by a young child who is not mature enough to handle money;
- remains private and confidential
- allows the trustor to manage their own assets and property while they are willing and able.
- Takes steps to assign a trustee to take over the management of assets and property as the trusttor desires, in case of the trustor being incapable or disabled;
- is more legal preparation up front, with more up-front costs, but with less burden and expense on a surviving spouse, children or other heirs.
Will (“Last Will and Testament”)
A will is a document that is created by an individual to lay out steps and plans for their assets upon their death.
- only becomes valid and put into effect when a person has passed away;
- can be changed up until a person’s death so long as they are competent;
- needs to file for a probate through a court to establish the validity and to assign an executor to the estate;
- becomes public knowledge and thus does not remain private.
- requires court involvement (“conservatorship”) if the individual who created the will becomes incapacitated while he or she is still alive, and the courts will assign a conservator to manage the estate.
- is cheaper and easier up front, but leaves more expense and time for the surviving spouse, children or other heirs after the person has passed away. Oftentimes a will results in 2 or 3 years of delayed court expenses.
To understand the difference between a trust versus a will, it is important to understand the ins and outs of each. Now that we have highlighted just some of the areas that make up the basics of each, there are more in depth aspects that have not been covered. To know what is best for your estate planning needs, contact Phelps LaClair to go over what will be best for you and your loved ones. Phelps LaClair has been serving clients in Gilbert, Mesa, Scottsdale, Phoenix and several areas for over 40 years.
Images used under creative commons license – commercial use (5/16/2017) ELSA International (Flickr)