When planning your estate, choosing the right type of trust can make all the difference in how assets are managed and distributed. Two common options are testamentary trusts and living trusts, each serving distinct purposes. Here’s how they compare and when each might be the right choice.
What Is a Testamentary Trust?
A testamentary trust is created through a will and only goes into effect after the grantor passes away. It is subject to the probate process, meaning a court must oversee asset distribution before the trust is activated.
Benefits of a Testamentary Trust:
- Provides structured asset distribution for heirs
- Allows a grantor to dictate how and when beneficiaries receive their inheritance
- Can offer protection for minors or individuals with specific financial needs
What Is a Living Trust?
A living trust is established during the grantor’s lifetime, allowing assets to be transferred and managed immediately. Living trusts can be either revocable (modifiable) or irrevocable (permanent). Unlike testamentary trusts, living trusts bypass probate, ensuring a smoother asset transfer.
Benefits of a Living Trust:
- Avoids probate, reducing delays and costs
- Provides privacy, as trust details remain out of public record
- Allows continuous asset management in case of incapacity
- Can be modified to reflect changing financial or personal circumstances
Which Trust Is Right for You?
Choose a testamentary trust if you want structured posthumous control over assets but don’t need immediate asset transfers.
Opt for a living trust if you prefer to avoid probate and ensure seamless management while alive.
Why Legal Guidance Matters
Estate planning requires careful structuring to ensure your assets are protected and distributed according to your wishes. An experienced estate planning attorney can help determine the best trust structure based on your goals.
For professional assistance, consider reaching out to The Eastman Law Firm:
Contact Us Today
Name: The Eastman Law Firm
Address: 4901 W. 136th Street, Ste. 240Leawood, Kansas66224
Phone Number: (913) 908-9113
Website: www.theeastmanlawfirm.com
Understanding the differences between testamentary and living trusts can help you make an informed decision about your estate.
