Living Trust vs. Will: Which Is Right for You?

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If you haven’t taken any steps to set up your financial legacy before you die, you’re considered intestate, which means that your state’s statutes will specify who inherits your property. If, however, you want to decide for yourself who inherits your assets, you should execute a will or living trust.

Although neither a will nor a living trust gives you any estate tax breaks, there are other considerations that might make one the better option for you. Reference the chart to quickly see which each offers, then make a decision based on your needs.

Living Trust vs. Will: Which Is Right for You?
Will Living Trust
Devises property Yes Yes
Can leave property in trust or outright Yes Yes
Avoids probate No Yes
Names guardian Yes No
Maintains privacy No Yes
Easy to draft Yes  No
Easy to administer Yes Yes

What Is a Will?

A will is a document that specifies how your property should be distributed upon your death. You can leave it to your beneficiaries outright or in a testamentary trust in your will.

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Any property that passes under your will, however, must go through probate, which is a court-supervised process of distributing your property after your death. In addition, a will is a legal document you must use to name a guardian for your minor child — you can’t do that with a trust. Each state has requirements for executing a will, one of which usually involves having witnesses sign it.

What Is a Living Trust?

A living trust is a document that allows you to pass your assets to your beneficiaries without the probate process. The trust governs any assets that you retitle in the name of your trust, so after you execute your trust you should retitle all of your assets in its name.

Upon your death, your successor trustee distributes your assets without court oversight because you are avoiding probate. Living trusts generally must be notarized by a notary public, but the requirements vary by state.

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Here Are Your Options: Revocable Trusts, Irrevocable Trusts and the 6 Other Trust Accounts You Can Open

Advantages of Wills

Having trouble deciding between a will and a trust? Take a look at the pros of a will:

Related: How to Write a Will That Protects Your Assets

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Advantages of Living Trusts

Like wills, trusts have advantages. Review them and see if they help you decide:

Which Document Is Best for You?

If your estate has a straightforward distribution — for instance, if everything is passing outright to your spouse or divided equally among your adult children and all of your assets are in the same state — a will could be sufficient. If you have a more complex plan of distribution, don’t want your financial information made public or have property in multiple states, a trust might serve you better. Even if you opt for a living trust, you should always prepare a “pour-over” will, which ensures that any assets that aren’t titled in the name of your trust pass to your trust upon your death.

Up Next: Your Estate Planning Checklist — How to Create a Financially Sound Estate Plan