Wills and living trusts are popular terms when discussing options for leaving gifts or an inheritance upon death. While there are similarities between the two, the differences in the way they operate to transfer one’s assets can be profound. There’s no doubt that a valid will can transfer assets, but its limitations make it a far less attractive option for those seeking more protection and control at death or incapacity.
In short, a will facilitates the distribution of one’s personal assets and takes effect only upon the death of its creator (AKA the decedent/testator). A trust does the same, however, it allows another person to manage the assets within the trust if the creator suffers incapacity while still alive. This critical distinction may ensure that your family and finances are taken care of in the event that your physical or mental condition is severely impaired. A debilitating accident or illness can easily trigger these circumstances for you or someone you love.
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Moreover, a living trust can include more detailed distribution instructions than a will, maintain the privacy of your final wishes, and eliminate the burdensome probate process that is far too complicated here in California. When coupled with appropriate health and financial powers of attorney, a living trust may be the best “contract” or agreement you’ll ever prepare during your life time. Those you leave behind stand to benefit from your preparation.
We understand that contemplating mortality can be an unpleasant experience. Yet, we are certain that none of us will make it out of here alive. When considering end-of-life decisions, and what impact a will or trust may have on the outcome, it’s imperative to carefully consider your options. A conversation with an estate planning attorney, one who will design a plan according to your unique family dynamics, should be the first step in this important life decision.