Most people only have a vague idea of what a will and a living trust are. Since both involve transferring or protecting assets, they often get mixed up. Both of these documents serve different purposes.
A will essentially does four things:
A will only goes into effect after you die. It covers any property in your name upon death but does not cover property held in a trust or joint tenancy.
For a will to be carried out, it must first pass through probate. Probate is the legal process in which the court ensures the will is valid; that outstanding debt, legal fees and taxes are paid; and that all assets have been appraised before being distributed.
A trust is a legal relationship in which a trustee, or the person or company, holds the property or assets for the beneficiary.
A living trust allows you to manage your assets both before and after death. Similar to a will, a living trust details your desires regarding your assets, dependents and heirs. Your assets – such as investments, bank accounts, real estate, and personal property – are placed into a trust that defines how to distribute those assets upon death.
If you are serving as the trustee, it also allows you to name a successor upon your death or incapacity. As the trustee, you remain in complete control of your assets and can move them in and out as you wish.
There are a few key differences between a will and living trust.
It’s also important to keep in mind that unless you fund the trust or place assets into it, it is useless and offers no benefit.
Which is preferable will depend on your situation, but the size of your estate is usually the biggest factor. Wealthier individuals can save their beneficiaries more money by choosing a living trust to dodge probate than those with smaller estates.
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Edwardsville
217 South Main Street, Edwardsville, IL 62025
618.659.4499
East Alton
1 Terminal Dr. East Alton, IL 62024
618.258.4800
Wentzville
511 W. Pearce Blvd. Wentzville, MO 63385
636.332.5555
Swansea
7a Park Place Swansea, IL 62226
618.239.4430
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636.332.5555
Creve Coeur
12747 Olive Blvd., #300, St. Louis, MO
636.332.5555
Mt. Vernon
1115 Harrison St, Mt. Vernon IL
618.242.0200
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