What's the difference between a will and a living trust, and which one should I have?

A will and a living trust both serve the purpose of distributing assets after one's death, but their differences lie in the structure and timing of their implementation.

A will is a legal document that directs how one's assets should be distributed upon their death. It is typically a simple document that can be created with the help of an attorney. After one's death, the will must be submitted to probate court, where a judge will oversee the distribution of assets. During probate, the court will validate the will, settle any debts or taxes owed by the estate, and distribute assets according to the will's instructions. This process can take anywhere from several months to several years, and it is subject to the payment of court and legal fees.

A living trust, on the other hand, is a legal document that allows one to transfer ownership of their assets to the trust while they are still alive. The assets in the trust are managed by a trustee, who can be the creator of the trust or a third-party designated by the creator. Upon the creator's death, the assets in the trust are distributed to the beneficiaries named in the trust, without the need for probate court involvement. This process avoids the time and expenses of probate, and also allows for more privacy, as probate proceedings are a matter of public record.

Which one should a person have? The answer depends on individual circumstances. A will is often sufficient for those with a straightforward estate, while a living trust may be more appropriate for those with complex assets or specific desires for how their assets are to be handled. Living trusts may also provide protection and flexibility in the event of incapacity or disability. An attorney can help determine the best option for each individual's situation.

It is important to note that while a living trust avoids probate, it may not necessarily avoid estate taxes. Additionally, both wills and living trusts have specific legal requirements for their validity, and failure to follow these requirements can result in the document being declared invalid or incomplete.

In sum, both wills and living trusts serve the purpose of distributing one's assets after their death, but they differ in their structure and implementation. The best option depends on individual circumstances, and consulting with an attorney is recommended to ensure the document is legally sound and appropriate for one's needs.