Purpose of Living Trusts and Wills

1. Transfer Assets:

What is the main purpose of a living trust and a will?  The sad fact of life is that we don’t live forever.  Also, you have heard the expression “you don’t take it with you” meaning that you can’t use your assets when you are dead. So, what happens to your assets when you die?  Who gets them and how? In short, wills and trusts are about transferring your assets to someone else when you die.  It is important to focus on the “T” word (transfer) to understand how wills and trusts function. Transfer means that an asset changes hands or legal ownership from one person to another.

Do trusts and wills transfer assets the same way? No, there is a significant difference in the way that assets transfer to someone else with a will compared to a trust.  You could say that wills don’t actually transfer assets, but only set forth your wishes about how you want your assets to be transferred and for the transfer to take place the will must be lodged with the probate court to be administered through a lengthy and expensive probate process. Compared to a trust, there is an actual transfer that takes place of certain assets transferring from the “Trustor” (the person who owns and creates the Trust) to the “Trustee” (the person selected to manage the assets that have been funded into the Trust) who then has the control and power to transfer your assets to someone else, a “Beneficiary”, on your death.

Is it better to have assets to transfer through probate or through a trust? Generally speaking, it is more beneficial to have assets transfer to someone else through a trust compared to probate. The difference is that a probate tend to cost more, take more time, and have less privacy.

2. Protect Your Wishes.

With a trust or a will you can set forth who you want to give your assets to when you die.  You shouldn’t assume that that the law will automatically care of what you want to happen or that others can read your mind. It is important to clearly set forth who gets what and when.

You can choose people to help you.  With a living trust or will you can designate or appoint people to help take care of your affairs after you are gone.  In addition to distributing property to your beneficiaries, there may be bills to pay, creditors to contact, taxes to be filed, and government agencies to be notified.

About Living Trusts

What is a living trust?

How does a living trust work?

Can I change my living trust?

Does a living trust avoid probate?

About Wills

What is a will?

How does a will work?

Can I change my will?

Does a will go through the probate process?

Law Office of Michael Johnson