Creating an estate plan is important for all people. In doing so, there are a variety of tools that can allow them to create the plan that is best for them. When going through this process, people generally only have a vague understanding of what these tools are and how they can benefit a plan. This tends to be seen when discussing the differences between a will and a living trust. While both of these tools help to protect and transfer assets, they also serve their own purposes. Continue reading below to learn more and contact an experienced New York estate planning attorney for guidance during this process.
What is a Will?
There are four main reasons as to why people use a will in their estate plan. This includes:
- Gives instructions on how assets and property should be distributed upon a person’s death
- Names beneficiaries
- Allows a person to choose an executor to oversee the distribution of their assets
- Allows a person to choose a guardian to finish raising their minor children
A will goes into effect only after its creator dies. This document does not cover any property that is jointly held, but only property that is in their name alone. In order for the will to be carried out, it first has to go through. This is a legal process in which the court determines whether the document is valid, outstanding debts are paid, and all assets have been appraised so they can be distributed.
What is a Living Trust?
A trust establishes a legal relationship between a trustee and a beneficiary. The trustee is the individual who holds and manages the assets within a trust on behalf of the beneficiary, who is the individual intended to inherit the assets. A living trust allows them to manage the assets before and after the death occurs. The trust holds the assets and defines how they are meant to be distributed. The trustee is allowed complete control of the assets and can move them as they wish.
What is the Difference Between a Will and Living Trust?
There are a few differences between a will and a trust. This is as follows:
- A will does not go into effect until you die while a living trust takes effect as soon as it is created
- A living trust allows you to bypass probate
- A living trust ensures privacy while a will is a public document
- Living trusts are generally more expensive to set up than a will
Contact our Firm
The Lauterbach Law Firm is proud to serve clients throughout Rockland County who are faced with legal matters related to estate planning, real estate, foreclosure defense, landlord-tenant law, business law, and criminal defense. If you require the services of an experienced team of attorneys, contact The Lauterbach Law Firm today to schedule a consultation.
