Living trusts and wills are estate will planning documents used to provide guidelines for the distribution of assets in an estate after demise of the estate owner. It is important for individuals to have as much information as possible about the various options available for creating an estate plan. This article addresses a few commonly asked questions about living trusts and wills for those keen on protecting their assets posthumously.
Why Are Living Trusts More Expensive To Establish Than Will Documents?
The immediate cost of establishing a living trust is often higher than that of creating a will document. This is often an issue of concern for individuals who may feel that the lawyer is trying to rip them off.
The extra cost of trust establishment stems from the nature of activities that have to be undertaken prior to establishing a trust. For a trust to be established, the assets in question have to be transferred to a trustee. This process requires a settler to prepare relevant documents for the transfer stock certificates, title deeds, changing the registration on bank accounts and deposit certificates, and so on.
In contrast, establishment of a will only requires the estate owner to draft and sign a written document in the presence of witnesses. This document provides details of how the estate in question should be executed in the event of death.
Is It More Difficult To Successfully Challenge A Living Trust In Court?
When it comes to challenging estate planning documents in court, an estate owner can only hope that none of their relatives, friends, or associates will want to contest their wishes.
Both trusts and wills are often challenged on grounds of incapacitation. However, chances of success with trust contestation are lower. This stems from the fact that the estate owner continues to have an active involvement with the trust once it has been established in the form of property transfers in and out of the trust as well as amendments to the trust. This involvement is prime face evidence of the mental competence of the estate owner throughout the life of the trust.
Can Will Documents And Living Trusts Be Used Simultaneously?
Living trusts and wills are both estate planning documents. The establishment of one does not eliminate the need for the other. In a large number of cases, estate owners do not transfer all their assets into the living trust for various reasons. It therefore becomes necessary for the estate owner to establish a will document for assets not transferred into the trust.
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