Besides helping you outline how you want your assets distributed in the event of death or incapacitation, an estate plan protects your loved ones against the often lengthy and expensive probate process. Several legal documents make up an effective estate plan, including a will, medical power of attorney, and living trust.
While both a Will and a living trust help transfer your property to loved ones or beneficiaries in case of death or incapacitation, they have some differences. Some differences make setting up one document better than setting up the other. In California, you can set up either or both as part of your estate plan. However, a living trust may be a better choice than a Will.
The Differences between a Living Trust and a Will
A Will is a legal document specifying how you want your assets distributed to your beneficiaries and loved ones after your death. You can also use it to appoint a guardian for your minor children. A living trust is a legal arrangement allowing for the transfer of your property to a third party, also known as a trustee.
- When they Become Effective
The major difference between a Will and a living trust is when they become effective. While a Will only takes effect upon your death, a living trust takes effect upon transferring the assets to the trust, which can be during your lifetime as the trustor. Essentially, you can control a living trust as its creator or grantor and hence can plan for the possibility of your incapacitation.
A living trust allows you to take care of things like healthcare and appoint a trustee to handle your affairs when you can no longer do so. The aspect of control makes a living trust better than a Will in California.
- The Probate Requirement
While a Probate court has to oversee the distribution of assets in a Will, a living trust does not go through probate. The cost of probate may be up to 10 percent of the estate’s value. Besides being costly, the probate court process often takes longer, including up to a year or more, to develop a distribution plan.
The probate court process is also public. A living trust is better than a Will in California as it avoids probate, is short, keeps the property transfer process private, and avoids unnecessary expenses.
Besides helping bypass the probate process and allowing you to control the distribution of your assets, a living trust has many other advantages, including reduced income and estate taxes. Essentially, a living trust allows you to meet some objectives that a Will cannot. While a living trust may require more money and effort to set up, its benefits are worth the extra cost.
Contact California Living Trust
At The Document People, we provide a cost-effective living trust package that includes articles of trust, pour-over will, power of attorney, and health care directive, among other services. Whether you choose a Will, a living trust, or both as your estate planning tools, you can rely on our California living trust experts to provide the best estate planning services. Contact us today at 760-754-9059 to schedule a free consultation and to learn more about our services.