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What distinguishes a Living Trust from a Living Will?

What distinguishes a Living Trust from a Living Will?

Full question:

What is the difference between a Living Trust and a Living Will?

Category: Trusts
Date: 04/07/2025
State: National

Answer:

A Living Trust is designed to transfer property and often helps avoid probate. The person who creates the trust (the grantor) transfers their property into it. The grantor can serve as the trustee or appoint someone else. The trust should be documented, and after the grantor's death, the assets can be managed by a new trustee or distributed according to the trust's terms. On the other hand, a Living Will is not related to property. Instead, it serves as a directive for medical personnel regarding a person's wishes if they are incapacitated and unlikely to recover, particularly concerning life support. In some states, a Health Care Directive or Medical Directive may be used in place of a Living Will.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What's better, a living trust or a will?

Choosing between a living trust and a will depends on your needs. A living trust can help avoid probate and manage assets during your lifetime, while a will is simpler and outlines how your assets should be distributed after death. If you have significant assets or wish to avoid probate, a living trust may be better. However, if you want a straightforward way to distribute your property, a will might suffice. It's best to consult with an attorney to determine what suits your situation best.

What is the downside of a living trust?

One downside of a living trust is the initial setup cost, which can be higher than creating a will. Additionally, you must actively transfer assets into the trust, which requires time and effort. If not properly funded, the trust may not effectively avoid probate. Furthermore, living trusts do not cover medical directives or end-of-life decisions, so you may still need a living will for those matters. Consulting an attorney can help you weigh these factors.