Interested in drafting a Pennsylvania estate planning document? Trying to figure out if you should draft a Will or a living trust? What is the difference?
In general, it is always smart to have an estate planning document in place so that you can ensure that your assets and things most near and dear to you will be given to the person(s) of your choosing upon your death (or during your lifetime). The key question to discuss with an estate planning attorney is - which of these documents is best given your particular situation?
A Will is a legal document which becomes effective upon death and can provide for the distribution of your estate. This document is what will be used in the event of your death to ensure that all of your property, possessions, and assets are distributed based on the individuals that you choose (your "beneficiaries").
A living trust creates a general fiduciary relationship where one person (the grantor or trustor) entrusts his/her assets to the trustee - who then has the job of transferring the trust assets to the beneficiaries of the trust. Simply stated, this is a way to transfer assets during a person's lifetime.
What are some other differences?
A will must be probated, meaning that the assets must be distributed through the assistance of the court, and must be distributed based on the intentions of the testator (will creator) and what he/she desired. A living trust, however, does not require this probate process. With a living trust, assets are essentially transferred into the trust before the grantor's death.
Which of these documents should you choose?
If you have a particularly large or complex estate, often assets are put into a living trust. Also, living trusts are often used in conjunction with wills, or for purposes of avoiding probate, reducing estate taxes, or setting up long-term property management. Living trusts are also good for individuals with minor children who want their children to receive certain particular assets upon reaching adulthood. A will, on the other hand, is basically your way of planning for after death estate distribution.
What is the best way to decide what to do? Speak with an experienced estate planning attorney first!