How to Choose Between a Will and a Living Trust
If you’re in a position where you have to make or aid in financial decisions for an elderly loved one, then you may have recognized the need for a document (or documents) to decide the disposition of their assets upon the time of their death. If your elderly loved one has not already taken the task upon themselves, the need for such a document should not be underestimated and the task of putting one together should not be put off. There can be serious financial consequences for their estate if there is no document in place to determine the disposition of assets. Your elderly loved one has presumably worked hard for what they have and would prefer to decide for themselves what happens to what they leave behind. Even if it seems as if they have little to nothing left to their name, there is potential for difficulties in the distribution of whatever assets they do have if no estate plan is put in place. However, estate planning can be time consuming, confusing, and costly. To get them started, you will first want to understand the key differences between the two primary types of estate plans, the living trust and a traditional will.
What Is a Living Trust?
A living trust is a document (or collection of documents) that provides instructions for the disposition of a persons assets during the remainder of their life, should they become incapacitated, and in the event of their death. Typically they are set up with a trustee, which could be you or your elderly loved one, depending on their capacity, and have successor trustees set up to manage the trust once your elderly loved one has passed. Living trusts are typically set up to manage finances and property in the event of the death or incapacitation of the trust holder and allows for ongoing management over the course of time set in the trust. It requires no court intervention and can be a terrific instrument to help avoid the inconvenience, public nature, and expense of a court-supervised distribution of an estate. They are more expensive to set up initially than a will, and require management, but they also allow for more nuanced distribution of assets.
What Is a Will?
A will is a simple written document, signed by your elderly loved one and witnessed, that provides instructions on the distribution of assets upon the time of their death. It provides for a single distribution of assets that may be contested in court, and allows for the appointing of guardians for any minor children your loved one may be responsible for. Wills are considerably less expensive to draw up and make official, though they (as mentioned above) can be contested, and they do not allow for management and nuanced distribution of assets over time.
Key Points of Difference and The Takeaway
A living trust is by nature more flexible and allows for managed distribution of assets over time. Additionally, a living trust can help to keep your affairs and the affairs of your family out of court and out of the papers. However, a living trust is more expensive to enact and requires maintenance from its enactment through its conclusion. If your elderly loved one’s estate can be managed and distributed simply (in other words, if there is little property and assets to be distributed) then a drawing up a will can suffice. If, however, there are multiple properties and assets, an abiding need for privacy and to keep the estate out of the courts, or the need to distribute property and assets over time to heirs who are currently minors, than a living trust may be the best choice. Either way, estate planning should not be put off.
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Diane Delaney, Placement Specialist Extraordinaire
Delaney is the founder of Golden Placement Services. She began this business with a healthy dose of compassion for helping families make educated decisions regarding senior placement. Focused to relieve stress in uncertain senior housing crucial moments. Diane brings about loving change of lifestyle with grace. Additionally, Diane is an accomplished executive manager, Director of Operations in senior housing. Emphatically, she enjoys sharing her experience by writing about the full spectrum of the transition process for seniors and family members.
LaVona Tomberlin, Senior Placement Specialist
Tomberlin brings a high level of education and experience to you as your Senior Placement Specialist at GPS. She loves writing about improving the lives of Elderly working in private care and in-home care for over 36 years. Geriatrics, Memory Care. Plus, she holds Master of Psychology Behavioral Health with the goal of advocating for those who needed a voice. Basically, LaVona believes helping the families to make good decisions and to relieve their stress in uncertain times makes life worthwhile!
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