If you want to have a say in what happens to your assets when you die, you’ll need to start your estate planning in Cary NC, now, if you haven't already. It can include a will or a living trust. Both will outline who gets your assets when you are gone. The difference is that a living trust avoids much of the probate process, which is when the court decides if your will is a valid document to be accepted and administered.
Differences Between Wills and Living Trusts | Estate Planning in Cary NC
There is more to both a will and a living trust, so let’s take a look at each one a little more closely.
Will | Estate Planning in Cary NC
- Name beneficiaries for your assets, which is the main purpose of both a will and living trust.
- Name an executor of your estate.
- Explain how your taxes and debts should be paid.
- Name guardians for your children and property managers for what they inherit from you if they are under 18 years of age.
- It can be revised, and it is fairly simple to write but it requires witnesses.
A living trust allows you to do everything above, but your assets are placed into a trust while you are living. It also allows you to do the following:
- Avoid most of probate probate, as mentioned above.
- Allows your affairs to remain private rather than become public record.
- Gives you protection from court challenges. Although rare, there have been cases where a living trust or will has been challenged in court. When this occurs, a living trust is harder to contest.
- Help you avoid a conservatorship.
A living trust can be more complicated and cost more to create, but it allows for more protection of your assets. If you have children who stand to inherit your estate, a living trust will allow you to establish provisions instructing when they will be entitled to the assets held in trust. If you have a special needs child or other family member, you will be able to leave more specific instructions on how his or her inheritance should be handled.
If your estate exceeds the current estate tax threshold, you may want to establish a trust with provisions for taxes. You can’t reduce your taxes, but you can plan for them ahead of time.
There are a few things that you can’t do with a will or living trust, such as leave money to pets, but you can use your will to name a caretaker for them. You can create a trust for your pet so that their new owner will have funds to care for them.
If you want to leave information about your accounts and passwords for your computer devices, you can do so for the executor of your estate. But it is not recommended that you put this information in a will or trust. It should be in a separate document that can be put away with your other documents for estate planning in Cary NC.
In order to determine if you need a will or a living trust, you will have to decide which objectives will meet the needs of you and your family.
If you need further help understanding the differences between these two important documents while estate planning in Cary NC, be sure to contact our office, soon.