There are many questions to consider when planning out your estate, but one of the most important is whether to use a will or a living trust to distribute your estate. The right strategy depends on your individual circumstances and needs, but how do you know which one you need? First off, here’s how they’re similar:
Similarities between a will and a living trust
- Both a will and a living trust are legal documents that allow you to decide what happens to your assets–basically, anything that you own–after your death.
- Both documents allow you to name beneficiaries for your property.
- Both documents may be changed.
- Without either a will or trust, the distribution of your estate will be determined by state laws called laws of intestacy.
Differences between a will and a living trust
- Unlike a trust, a will allows you to name a guardian for your children if they are still minors when you die.
- A living trust allows you to avoid the hassle and costs of probate court. A will must go through probate.
- Unlike a living trust, a will cannot be kept private. A trust can keep your affairs private and out of public record.
- A will must be signed in front of two witnesses in South Carolina. A trust, on the other hand, needs a stamp of approval by a notary.
- A trust is often more expensive than a typical will.
- When you create a living trust, you must “fund” it by transferring assets into it. Once the assets are in the trust, they technically belong to the trust itself and aren’t easily withdrawn. Any assets not transferred into the trust by the time you die will still be subject to probate.
Aside from these basic similarities and differences, there are various kinds of wills and trusts. Scott Allmon with Bagwell & Corley can help making estate planning straightforward and simple.