Does a Living Trust Have Advantages Over a Will?
You’ve heard of wills and trusts as legacy devices for transferring wealth. But what are the differences between them? And how do you know which one to choose? Questions like these are very common. The answers depend on what you want to achieve, and will be different for everyone. In some cases, people are best served by using both a will and a living trust to accomplish their goals.
Perhaps the main difference between a will and a living trust is that a will does not affect your property while you are alive. Rather, the will only takes effect at your death. A living trust, as the name implies, takes effect while the creator is still alive. The creator’s assets are moved into the trust right away, and the assets are administered for the benefit of the creator. Once he or she dies, the assets are transferred to designated beneficiaries.
If a will and trust both transfer assets at death, you may ask yourself why one might go to the trouble of creating a trust. After all, trusts tend to be more complicated and expensive to set up.
The primary reason why living trusts are so popular in Virginia is because assets placed into a trust do not go through the probate process. Wills, on the other hand, must be probated.
Avoiding probate is a priority for many people, because probate can be costly and lengthy. And if there’s a dispute among heirs, it can be possible for some or all of an estate’s assets to be consumed during probate.
Because wills go through probate, they are a matter of public record. Once on file in probate court, wills can be viewed by anyone who wishes to find out how you disposed of your assets. By contrast, the assets in a living trust don’t get probated, so the disposition of your estate affords more privacy.
Many people benefit by creating both a will and a living trust. In these situations, the will — often called a pour-over will — serves as a backup plan for any property that is left out of the trust. For example, let’s say you create a trust today and then buy property five years from now. Shortly after buying the property, you die without having transferred that property into the trust. This property cannot be transferred to the trust beneficiaries. Instead, the property would be passed down according to the laws of the state of Virginia, which is not how you may have wanted it. But if you have a will, its terms can ensure that the property is transferred according to your wishes, despite it not being part of the trust.
For more information on wills, living trusts and all aspects of estate planning in Virginia, please reach out to the experienced Charlottesville attorneys at Miller Law Group, P.C. You can call us at 434-218-3987 or contact us online to schedule a free appointment.