Do you want to leave behind certain assets for a family member or close friend? Knowing the difference between a living trust and a will can help you make the right choice for your situation.
We offer the following guidelines:
A will is a legal document that defines how a person wants to distribute his or her assets after death.
In California, you can create a simple will by filling out the California Statutory Will Form. This is most appropriate for individuals or couples who have a relatively small amount of assets. If you reside in another state, there may be additional requirements.
Setting up a simple will is usually inexpensive, which makes it an attractive option for some. You can also modify a will without a lot of hassle.
Usually, wills require probate court and can be challenged after you die, so you need to consider these possibilities before creating a will or a living trust. It may be in your best interest to consult an estate planning attorney if you have questions.
A living trust is a collection of your assets. This can include cash, investments, property, and other items of value.
One of the biggest differences between living trusts and wills happens occurs the beginning of the process. When you create the living trust, you must re-title your assets to be owned by the trust. When you die, the assets of the trust are distributed to your beneficiaries.
Because of the initial setup process, living trusts can be difficult to modify once they are finalized. Due to this complexity, trusts are usually more expensive to create. You should consider speaking with an estate attorney to ensure the legality of your documents and accounts.
Living trusts generally offer greater control over the way your assets are distributed, and you can usually avoid probate court. They can also help your beneficiaries avoid certain estate taxes.
Questions about Choosing a Will or Living Trust
If you want guidance in selecting the best estate plan, you can request a referral to an estate lawyer from the Lawyer Referral and Information Service (LRIS) of San Diego County. Call (619) 231-8585 for more information.