Written by Ron Cooke, President & Founder of Strategic Wealth Protection Partners in Ontario
What is the difference between a Living Trust and a Will?
A living trust is a legal document that takes effect during your lifetime, allowing you to manage and distribute your assets without going through probate.
In contrast, a will only comes into effect upon your death and typically requires probate to validate. Living trusts provide privacy as they are not made public, whereas wills become public records once filed.
Additionally, living trusts can manage assets if you become incapacitated, while wills cannot. Both are essential tools, but they serve different purposes depending on your estate planning needs.
| LIVING TRUST | WILL |
|---|---|
| Legal document that takes effect during your lifetime | Will comes into effect upon your death |
| Probate not required | Typically requires probate |
| Provides privacy | Becomes public record once filed |
| Can manage assets if you become incapacitated | Cannot manage assets if you become incapacitated |
| Not everyone needs a living trust | Everyone needs a will |
| Requires diligent management (eg. transferring assets into the trust) | Does need to be updated as life circumstances change, but doesn’t require diligent management |
Who should have a Living Trust and a Will?
Individuals with complex estates, blended families, or significant assets often benefit from having both a living trust and a will.
A living trust helps manage assets during your lifetime and ensures smooth transfer to beneficiaries, while a will addresses other matters like naming guardians for minor children. Those seeking to avoid probate, maintain privacy, or plan for potential incapacity should consider a living trust.
However, even individuals with simpler estates can use a will to ensure their wishes are clearly documented. Combining both tools creates a comprehensive estate plan.
What are the Pros and Cons of a Living Trust?
The benefits of a living trust include avoiding probate, maintaining privacy, and providing asset management during incapacity.
It can save time and reduce costs for your beneficiaries by bypassing the court system. However, creating a living trust can be more expensive and time-consuming upfront compared to a will. It also requires diligent management, such as transferring assets into the trust.
Despite these considerations, a living trust can offer long-term advantages that outweigh the initial effort for many individuals.
How does a Living Trust help your Beneficiaries?
A living trust simplifies the process of transferring assets, ensuring your beneficiaries receive their inheritance quickly and without the delays of probate.
It also minimizes disputes by clearly outlining your wishes and maintaining privacy.
Beneficiaries benefit from reduced legal fees and faster access to funds, which can be particularly important during challenging times. Additionally, a living trust can provide ongoing financial support and management for beneficiaries who are minors or have special needs.
Does a Living Trust help you reduce taxes?
While a living trust does not directly reduce taxes, it can be structured to work alongside other tax-saving strategies.
For example, combining a living trust with tax-efficient investments or gifting strategies can help minimize your estate’s tax liability.
By avoiding probate, a living trust may also reduce associated fees, indirectly preserving more of your wealth for your beneficiaries. Consulting an estate planning professional ensures your trust is optimized for maximum tax efficiency and aligned with your overall estate planning goals.
Discover the Benefits of a Living Trust in Ontario
Are you an Ontario resident considering a living trust as part of your estate planning?
At Strategic Wealth Protection Partners, we’re here to guide you through every step of the process with expert advice and personalized support. Begin your estate planning journey today with a Living Estate Plan Consultation from our experienced team.
Our mission at SWPP is to help you create an estate plan that secures your legacy, shields your assets from unnecessary taxation, and ensures your loved ones are cared for. By designing a living trust tailored to your goals, our experts will help you build a plan that truly reflects your values and priorities.
Take control of your future—start planning today!
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Planning your legacy is about more than numbers—it’s about ensuring your family remembers you and your values are honoured for many years to come.
Estate planning and trusts can feel overwhelming, especially if it’s your first time. That’s why we’re here.
With our simple, 5-Step Living Estate Plan, we make the process easy, helping you create a comprehensive estate plan or trust that protects your assets from taxes and probate fees while preserving your legacy. Tools like The Final Word Journal capture your story, wishes, and essential details like accounts and end-of-life plans, ensuring your family has clarity and comfort.
Take the first step today—schedule a consultation call and give your family the ultimate gift: peace of mind and the assurance they were always your priority.
Read More
If you’re starting your estate planning process, you may find these articles helpful:
- Is a Living Trust Better than a Will in Canada?
- What Is the Cost of a Living Trust in Canada?
- Why the ‘death binder’ is becoming an essential part of estate planning
About the Author
RON COOKE, PRESIDENT & FOUNDER OF STRATEGIC WEALTH PROTECTION PARTNERS
With over 30 years in financial services, I’ve seen the challenges families face when a loved one passes—lost assets, unnecessary taxes, and emotional stress. That’s why I created the Living Estate Plan, a comprehensive process to protect assets, eliminate estate and probate fees, and create legacies that are remembered for many years to come.
This plan ensures your family receives not just your wealth, but a meaningful reminder of your care and love. Tools like The Final Word Journal capture your story, wishes, and essential details, offering clarity and comfort during difficult times.
Your final gift should be more than money—it should be peace of mind, cherished memories, and an organized estate.
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