What is a living trust, and how does it differ from a will?

A living trust is a legal document that allows individuals to transfer ownership of their assets to a trust while they are still alive. Unlike a will, which takes effect after your death, a living trust can provide for the management and distribution of your assets while you are still alive and upon your death.

A living trust is managed by a trustee, a person or entity responsible for managing and distributing the trust assets in accordance with the terms of the trust. You can serve as the initial trustee of your own living trust, and then name one or more successor trustees to carry on this role when you are no longer able to do so.

One key advantage of a living trust is that it can help you avoid probate, the legal process of validating a will and distributing its assets. By transferring ownership of your assets to a living trust, these assets are not subject to the probate process and can pass directly to your designated beneficiaries.

Additionally, a living trust can help you provide for incapacity planning, allowing you to designate who will manage the trust assets in the event that you are unable to do so yourself. This can help avoid the need for a court-appointed conservatorship, which may be costly and time-consuming.

In contrast, a will only takes effect upon your death, and assets passing through a will must go through the probate process. A key disadvantage of a will is that it does not provide for incapacity planning or asset management during your lifetime.

However, it is important to note that a living trust may not be the best option for everyone. For example, if your estate is small and your assets can be easily distributed through a will, a living trust may not be necessary. Additionally, a living trust can be more expensive to set up than a will, and requires ongoing management to maintain its benefits.

If you are considering a living trust, it is important to consult with an experienced estate planning attorney to determine if a living trust is the best option for you, and to ensure that your trust is properly drafted and managed to meet your specific needs and goals.