Estate Planning | Difference Between A Living Trust And Living Will
Estate Planning | What happens to property belonging to a deceased person is largely a matter of a process called Estate Planning. It is handled legally through a legal procedure called probate. After a person dies, their affairs are concluded according to that person’s wishes recorded in a will. Some people choose to establish a living trust instead of a will, so their affairs can be actively governed after they pass away. The difference between these two legal arrangements depends on whether the person’s estate undergoes a process called probate.
A properly drafted and authenticated will is a legal document that determines what happens to the property of a person after they pass away. The process is usually supervised by an executor, who is a person with a fiduciary responsibility to carry out the instructions in the will. Estates with a will usually go through probate, which is a process carried out by a court of law to make certain that the estate is protected and the will is lawfully executed.
The Living Trust
A trust is a legal entity that must be established by a person before they pass away as part of their estate planning. The property they wish to pass on to their beneficiaries is transferred to the trust, and then administrated by a trustee for the benefit of those the deceased wishes to name as beneficiaries. Trusts are generally only useful for the management of an estate’s property. They can’t be used to appoint guardians for children or leave instructions on how debts or taxes should be paid.
The primary difference between a living trust and a will is that the trust can both avoid probate entirely and maintain a certain level of privacy for the deceased and his or her family.
The Living Will
When a person wishes to leave instructions regarding their ongoing medical treatment in the event of an accident or emergency, they can draft and file a document called a “living will.” The idea of the document is to communicate the will of the person while they are still alive but unable to manage their affairs or respond to questions regarding their wishes. In this way a living will is considered a specialized type of will.