There are many different tools that can be used to create an estate plan that meets your individual needs. However, most people only have a vague understanding of what each tool does and how it can benefit an estate plan. For example, the differences between a will and a living trust. While both tools protect and transfer assets, they also serve their own purposes. Continue reading below to learn more and contact an experienced Alabama estate planning attorney for guidance during this process.
What is a Will?
A will allows people to do four main things, including:
- 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
It is important to note that a will does not cover any jointly owned assets, only ones that are in the individual’s name alone. This document only goes into effect after its creator dies. When it does, the will must first go through probate before it can be carried out. This is a legal process that works to determine if the document is valid, outstanding debts are paid, and all assets have been appraised to be distributed.
What is a Living Trust?
A trust establishes a legal relationship between a trustee and a beneficiary. The trustee holds and manages the assets on behalf of the beneficiary, who is the person inheriting the assets. The trust not only holds the assets but also outlines how they are meant to be distributed. A living trust gives a trustee the right to control 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
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Stone Crosby, P.C. has proudly served clients in Alabama for over 100 years. Our firm has experience handling matters including divorce and family law, estate planning and administration, business law, employment law, class actions, consumer protection, business law, real estate law, among many others. If you require quality legal representation, contact our firm today to schedule a consultation.