Wills and living trusts are legal documents that distribute property. Both are useful estate planning tools, but there are important differences. With a living trust, a representative is appointed to manage your property while you’re alive (even if you become incapacitated) and distribute your property when you die. On the other hand, a will appoints executors who manage and distribute property only when you die.
One of the main advantages of a living trust is that it avoids probate. With a will, your estate goes through court proceedings in which your assets are distributed to heirs and creditors. With a simple, uncontested will, probate can take months. This can stretch into years if multiple heirs and creditors contest your will. However, with a living trust, debts are paid and assets distributed within weeks. This not only saves time, it saves expensive court costs.
In addition to helping you avoid nasty and costly probate conflicts, living trusts provide greater privacy. While a will is a public record, a living trust distributes your estate in private. Also, since a living will takes effect while you’re alive, there’s no need to appoint an additional representative for health care or power of attorney, as is the case with a will.
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