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Do You Need a Will or a Living Trust?

Posted on 09 Jun 2011 by admin | Filled under: uncategorized

One of the most common mistakes that people make with estate planning is in thinking that if they are not wealthy, they don't need a living trust. If you consider the value of everything you own, such as you home, vehicles, bank accounts, art collection, jewelry, and life insurance, you will likely find that your estate is worth much more than what you think.

If you don't have a living trust your estate could go into probate, which can be very costly. In addition to being subject to probate, your estate will also be vulnerable to federal estate taxes. In 2011 the federal estate tax will return, and the exclusion could be only 1 million.

There are actually several advantages of using a living trust instead of a will, the first being privacy. After someone dies his or her will becomes public record and anyone can view it. Another advantage is that a will is subject to probate where a living trust isn't; this alone could save your estate thousands of dollars.

In many cases a living trust also provides you with more control, as well as some protection of your assets from creditors. If your beneficiaries have financial problems, their creditors cannot touch the assets in your trust. On the other hand, if the assets are given directly to the beneficiary through a will, they are then subject to collection efforts by creditors.

One other significant advantage that a living trust has over a will is that after your death, your loved ones will have access to their inheritance much faster. With a will, their inheritance may be tied up in probate for months, but this isn't the case with the living trust.
It is easy to see why many people choose a living trust as part of their estate plan. The significant advantages a living trust has over a will can be helpful to anyone, no matter how large or small their estate is.