by Anonymouse

Created on: December 01, 2008   Last Updated: January 20, 2009

Though written wills and living trusts are somewhat similar, they do have substantial differences. Deciding between the two can be challenging. Those involved should consider probate, management of assets, and expenses over everything else.

Last Will and Testament

Wills must be written on paper by a testator of sound mind, and signed by two witnesses who are not beneficiaries. A Last Will and Testament clarifies who will receive the testator's property once he/she is deceased. The very end of the document must be signed and dated; any requests following this binding signature will be considered irrelevant. Testators who previously wrote wills or codicils must revoke them with statements in their new wills, but since the aid of an attorney is unnecessary, the will-creation process is still remarkably simple.

The Living Trust

Living trusts are also known as "revocable" and "inter vivos" trusts. Those who open them are called settlors, grantors, or trustors. They share their property rights with chosen trustees. A settlor can be the only trustee and beneficiary named on his/her living trust until death, after which a successor trustee can gain access. This may be an individual or a financial institution. The successor trustee can avoid the drawn-out probate process and fees involved. However, he/she needs to be extremely reliable; the distribution of assets will be under his/her control.

Benefits: Last Will and Testament

Preparing a will is inexpensive and hassle-free. Living trusts are exactly the opposite. Ownership of new assets must always be transferred to the trust to avoid probate. If a third party trustee is included, an annual trust income tax return will need to be filed. In addition to being bothersome and costly, living trusts offer less peace of mind than wills. While probate may be expensive, it does guarantee the court's involvement in disputes over property distribution. This means testators can rest assured: their assets will be allocated as they requested in their wills.

Benefits: The Living Trust

Living trusts are promoted as the way to avoid probate litigation, which usually takes from six months to one year. The cost of probating a will can be extraordinary. Furthermore, out-of-state property requires probate in that state, as well as the testator's home state. Living trusts make the process much easier - no probate in either state. Another benefit of living trusts: they are useful in keeping family business private. While wills become public record once in effect, living trusts can be kept confidential. Setting one up requires the aid of an attorney and fees that coincide.

Is Probate Necessary?

Probate litigation is more than necessary for select families. If disputes are likely to arise after the testator passes on, this process might very well be in his/her best interest; the assigned executor will be monitored by the court during the distribution of property. On the contrary, living trusts make it possible for successor trustees to keep assets for themselves - even against the settlor's final wishes. When determining whether probate is necessary, the worthiness of a successor trustee and the involvement of the court should always be considered.

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