A lot of people hear about how they need to create a last will and testament while still of sound mind. However, wills are not right for everyone. There are many other estate planning documents available, and you may benefit more from a living trust. You can get different types of trusts, but they all work to protect your assets.
No one document is inherently better than the other. It all comes down to what type of assets you own and how you wish to divide everything upon your passing. Before you continue estate planning, you should learn the basic differences between the two documents, so you know which one is best for your situation.
Trusts provide for life and death
A will goes into effect once you pass away. A living trust goes into effect as soon as you sign it. You can alter either document at any time, but if you believe you will need the aid while still alive, then you should consider a trust. A will does not do anything if you develop a disability and cannot make decisions independently. A living trust would clearly lay out what kind of medical care you desire if you develop a medical issue. A trust can also lay out how to spend someone’s finances so people do not try to take advantage of the individual.
They each cover different property
A will only provides for property you own fully in your sole name at the time of your death. This also includes any interests or stocks you own. A will does not cover assets that need to go from one person to the next through a legal authority, such as a life insurance policy. A living trust governs everything you have and funded with your money. This is due to the fact you transfer all these assets into the trust at the time of formation.