Both Living Trusts and Last Wills and Testaments (“Wills”) are Estate Planning vehicles. “Vehicles” because both are methods of achieving goals related to the distribution of assets post-death, to lawful avoidance of taxes (in some cases), to avoidance of probate costs and expenses, and to the accomplishment of other tasks. Both involve complex documents that should be prepared by experienced Maryland/D.C. estate planning attorneys. Both involve careful attention to goals, both must be drafted and validly executed, and both can be modified over the years as goals change.
In the very broadest sense, the main differences between a Will and a living trust are:
- A Will is a static document that does not legally “activate” until after the death of the maker while and a living trust begins to operate at the time that the trust documents are executed while the maker of the trust is still living.
- A Will is more like a list of the maker’s assets, while a living trust actually owns those assets.
Everyone needs a Will, but a living trust is probably useful only for those with substantial assets and a more complex desire for the distribution of assets after death. Here is some additional detail.
What is Maryland/DC Will?
As noted, a Maryland/DC Will is a written document that is signed by the maker of the Will that must satisfy the legal requirements for being a valid Will. A certain legally required language must be included, and in terms of execution, there must be a minimum of two competent witnesses at the signing of the Will. Generally, a Will will have the following essential features:
- Details on what the maker of the Will — the decedent — has in terms of assets and belongings, including personal property, money, real estate, royalty rights, etc.
- Details on how the decedent wants their assets distributed after death — those receiving assets can be family members, friends, heirs, charities, not-for-profits, etc.; these are the “beneficiaries” of the Will.
- The naming of a person (with alternatives) to be the decedent’s Personal Representative/Executor to handle matters after death.
- Where applicable, the naming of Guardians for minor children or other dependents.
Upon death, the Will is filed with the relevant Probate Court. The person designated in the Will to handle matters is then appointed by the Probate Court to be the Personal Representative in an official manner. With some exceptions, all assets of the decedent are then distributed to family, heirs, and others through the Probate process.
What is a Maryland/D.C. living trust?
Generally, a trust is a set of legal documents that creates a legal entity called a “Trust.” A Trust has a Grantor, at least one Trustee, and at least one beneficiary. The Grantor deposits assets into the Trust, and the Trust is managed by the Trustee for the benefit of the beneficiary (or beneficiaries).
A Maryland/D.C. living trust is one type of trust that is commonly used for Estate Planning purposes. The trust documents generally contain many of the same features that are listed above for what is included in a Will. With a living trust, often the Grantor, Trustee, and the beneficiary is the same person. During their lifetime, the Grantor deposits into the Trust as many assets as possible. This is done by careful attention to how assets are titled. Upon death, those assets—hopefully all of the decedent’s assets—will NOT be subject to probate proceedings. Such will pass to heirs and others per the instructions outlined in the Trust documents. Further, since the Grantor is also the Trustee, as Trustee they can manage the assets and use them for the benefit of the beneficiary (who is also the Grantor and the Trustee).
Which is right for me?
Whether a Will or living trust is the right choice for you depends on many factors. It is best to seek a consultation with a skilled and dedicated Maryland/D.C. Estate Planning attorney.
Maryland and D.C. Trust and Estate Planning Attorneys
If you are thinking about establishing a trust or need estate planning documents drafted, contact the Maryland and D.C. trust and estate planning lawyers at The Law Offices of Thomas Stahl. We have the experience and expertise you need. Schedule a consultation today or call us at (443) 331-2770. We have offices in Columbia, MD, and Washington, DC.
The post Maryland/D.C. Estate Planning: What is The Difference Between a Living Trust and a Will? appeared first on Law Offices of Thomas Stahl.