Wills and living trusts are the two most frequently used documents for estate planning. When drafting your estate plan, it’s a good idea to understand some of the similarities and differences.
A will, also called a “last will and testament,” is a written, legal declaration of your wishes for how your property and wealth will be distributed after your passing. If you have children, a valid will also enables you to name a person who will look after them.
With a living trust, you can control how your assets are handled both during your life and after your passing. A living trust gives you authority over the trust assets while “owning” the property listed in it. These assets will then be transferred to the beneficiaries you specify after your death.
Living trusts and wills are very different legal documents with distinct functions—but there are also similarities.
A living trust is viewed as a completely independent legal entity from you as an individual. As a result, living trusts offer some protections that wills do not. As you create your estate plan, it’s crucial to understand the differences between the two.
Many individuals create a living trust in addition to their will to afford their heirs and beneficiaries an increased level of security over a portion of their estate.
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