This estate planning website was created in 2007 to clearly define a living trust vs will in easy-to-understand terms for both young families and those without dependent children.
You will learn similarities and differences between different estate planning documents and discover ways to optimize your estate plan's effectiveness.
As you read the site, prepare a list of questions for a future meeting with an estate planner. If you are the successor trustee of an existing trust we hope this site provides answers to potential questions but do not hesitate to contact a local attorney for assistance.
Before discussing their differences, both wills and living trusts perform two very similar functions:
Last will & testaments state "where" assets will go. Wills provide no control how assets are used.
Living trusts can state "where", "when" and "how" assets will be distributed. They can hold assets long after the trust's creator passes.
Living trusts have this ability because they are legal entities. A living trust can hold real estate, vehicles, bank accounts and non-qualified (after tax) investments. A life insurance policy or retirement account might list a living trust as the beneficiary.
A living trust does not replace a will. It is used in conjunction with a special will called a "pour over will", which can direct the distribution of assets left outside the trust and lacking beneficiary designations. The pour over will often lists the living trust as the beneficiary.