The two most prominent documents used in estate planning are a Last Will and Testament and Living Trust. Both documents can plan for your family and assets following your passing, and often the two are used together for more complete estate plan. While both can handle the bulk of your estate planning, there are differences between the two.
Last Will and Testament
A Last Will and Testament is the most basic of your estate planning documents and includes the following attributes:
- You are able to name an executor of your will to handle your wishes and estate. An executor will help work your will through the probate process and handle the distributions of your property and assets following probate fees, taxes and payment of all debts.
- You are able to list specific items or percentages of your assets as bequests to certain parties to be distributed when the parties reach a legal age.
- You are able to select a custodian for your children and their assets until they reach legal age.
- Your will be put through probate following your death and property would be held by the court until the probate process was complete and all applicable fees have been paid.
A Living Trust is a more advanced estate planning tool used to give you additional options for distributing your assets as well as protection from many of the fees and delays caused by probate. A Trust has the following attributes:
- You are able to assign a trustee to handle your trust following your demise or incapacity for any reason. The executor will pay all applicable taxes and debts then distribute or continue to manage your property as you’ve requested.
- You can make bequests to specific parties in any format you like. You may elect to distribute your property and accounts immediately following your passing or you can set up a plan for distribution over a span of time and with conditions you set to be sure your bequest is being made in a way that suits the individual and your preferences.
- You are able to select a guardian for your children until they are of legal age and for their assets until a time based on any condition you set.
- Your living trust will be managed during your lifetime and transfer to another designated trustee following your death or incapacitation with no interruptions or publicity in the court.