You have an estate that consists of all that you own, no matter how modest or extravagant the sum of your possessions. Estate planning is needed so that your wishes will be carried out should you become incapacitated and after your death. In Arizona, the most common ways to handle estate planning is by preparing a Will or a Living Trust. To help you make a decision when considering a living trust vs will, see details below.
Living Trust vs Will Basics
A living trust is also known as a revocable living trust
. There are important differences when comparing a living trust vs will. For instance, a living trust is a private agreement while a will becomes part of public record following your death. If you leave a will, your loved ones would likely need to concern themselves with the additional requirements required by a probate.
This could mean, among other things, that your loved ones will be forced to pay expensive court costs and deal with mandatory waiting periods, public notices to creditors, and possibly legal contests between dissatisfied heirs.
Wills cover all property in your name up to the point of your death. Living trusts cover only the property specifically transferred to it.
One matter that must be handled in a will, due to the nature of Arizona law, is who you want to care for your minor children. Oftentimes, both documents are found to be essential when comparing a living trust vs will, and both are often necessary as the most advantageous approach to handling your estate.
Clearly, there are benefits to a living trust that you should know about as you consider estate planning, particularly if you have assets worth more than $75,000. The following are among the benefits of a properly funded living trust vs will.
Control and Flexibility
During your lifetime, you retain full control over all of your assets. Your assets listed in the trust are distributed and managed as indicated by you in the document. If you don’t want certain beneficiaries, such as grandchildren, to receive their inheritance immediately, you can specify that, as well as other details. Flexibility ensures that you can provide for each loved one in the manner that you desire.
Who inherits your estate, how much beneficiaries receive, and when they receive it are all private matters.
Continuity of Asset Management
The Successor Trustee you designate in your living trust will be able to step in and immediately begin managing your estate upon your death with no delays. Because your estate is not forced into probate, all of the associated red tape is also eliminated.
Plans for Incapacitation
When you set up a revocable living trust, the Successor Trustee can handle daily asset management without delay if you become incapacitated or simply wish to be free of the day-to-day activities involved in your estate.
Because your assets are not subject to probate administration, you save your beneficiaries thousands of dollars in fees and court costs. A living trust also prevents your assets from being tied up in probate and inaccessible to your loved ones for as long as two years.
A Tax Advantage
Trusts can help reduce taxes in certain circumstances, particularly for married couples.
In a will, you provide a list of instructions regarding how you want your estate to be handled upon your death. An executor will need to be named for the management and distribution of your assets in the way that you’ve indicated. Because all matters in a will are subject to probate, your executor is unable to act on your behalf without the express written approval of the probate court.
You can change your will with an amendment called a “codicil.” Making changes is easy and can be done at any time.
When you near the end of your life, a living will, also known as a Medical Living Will, details how you want your last days to be spent. It covers such matters of whether or not to resuscitate you when your life is dependent upon machines. A living will helps to simplify matters for your family and can eliminate guilt, especially if family members have differing opinions about what they believe you would have wanted.
Peace of Mind
As you consider living trust vs will, it’s important to realize that both documents serve essential functions in a comprehensive estate plan. The best way to enjoy peace of mind regarding the handling of your estate is to enlist the help of a qualified attorney. Law Offices of Paula Hannah, PLC is experienced in Arizona estate planning. She can answer your questions and fill in all the details related to choosing between a living trust vs will. Schedule an appointment today for real peace of mind regarding these complex matters.