What is the difference between a living trust and a last will and testament?

As a lawyer, I am happy to provide legal advice on the difference between a living trust and a last will and testament.

A living trust, also known as a revocable trust or inter vivos trust, is a legal document that allows a person to transfer their assets into a trust during their lifetime. The person creating the trust, known as the grantor, can name themselves as the trustee, as well as name a successor trustee who will take over management of the trust when the grantor dies or becomes incapacitated. The trust assets are authorized to be distributed according to the terms of the trust, which can include naming beneficiaries and managing assets for the benefit of individuals or organizations, including charities.

On the other hand, a last will and testament is a legal document that allows a person to express their final wishes regarding the assets and property they leave behind after they die. The will can appoint an executor who will manage the estate, distribute assets to beneficiaries, and pay off any outstanding debts or taxes owed by the estate. The will can also be used to name guardians for minor children.

While both living trusts and wills are used to manage assets and distribute property, there are some key differences between them. One of the biggest benefits of a living trust is that it can operate outside of probate court. Probate court is a legal process that is required for a will, and it can be time-consuming and expensive. Assets in a living trust can be distributed without the need for probate court, which can save time and money.

Another benefit of a living trust is that it can provide more privacy than a will. Wills become public documents when they are filed with the court, which means that anyone can see them. Living trusts, however, are not filed with the court and can provide more privacy for beneficiaries.

However, living trusts can be more expensive to set up than wills, and they require ongoing maintenance and management. Assets need to be transferred into the trust during the grantor's lifetime, and any assets acquired after the trust is created need to be added to the trust. This can require additional legal and accounting work.

It is important to note that living trusts are not a substitute for a will. A will is still needed to name guardians for minor children, and to handle any assets that are not included in the trust. Additionally, any assets that are not transferred into the trust during the grantor's lifetime will still need to go through probate court.

In conclusion, the main difference between a living trust and a last will and testament is that a living trust can provide more privacy and avoid probate court, but can be more expensive and require ongoing management. A will is still necessary to handle assets that are not included in the trust and to name guardians for minor children. It's important to consult a licensed attorney to determine which option is best for your individual situation.