What’s the Difference Between a Will and a Trust?
Wills and living trusts are the two main ways for distributing property after death. If you’re considering how to divide your assets after your passing, you need to know how these two legal contracts differ from one another.
Not sure which one you need? Take a closer look to learn the difference between a will and a trust.
The Basics of Wills and Trusts
A will is a legal document that specifies your ultimate desires, names the people you want to inherit your property after you pass away, and names a guardian for any minor children you have left behind. An executor is the person in charge of following out a will’s instructions.
A trust is a legal document that specifies your intentions to your property after you are gone. It also specifies what will happen to you if you become paralyzed and unable to decide. Some of the different types of trusts are revocable and irrevocable trust, special needs, and asset protection trust.
The Difference Between a Will and a Trust
A trust takes effect right away, whereas a will does not take effect until after death. A will is a written document that specifies how your property and financial assets will be allocated after your passing.
The court will appoint a guardian or conservator to handle your affairs if you become incompetent and have simply written a will. In contrast, trusts let you act as the asset’s trustee while you are still alive.
In the event of your incapacity, the backup trustee named in your trust will be in charge of managing your assets on behalf of you and your beneficiaries. A court-appointed guardian or conservator is not required since you have control over who you choose to choose as your replacement trustee.
Wills must be filed with the probate court for administration after death. Probate is the open court procedure that allows the property to the right beneficiaries, such as those named in your will or your heirs, as defined by state law. Probate is frequently a costly and time-consuming process.
If you leave behind a trust, your trustee will take over its administration and distribution of your assets in accordance with the guidelines you established. Trusts are privately handled, unlike probate, and they do not require the intervention of a probate court.
Deciding Between a Will and a Trust
One of the best estate planning tips is to only consider trusts if you actually require more than a will. Who then requires a will vs trust when you could require both?
A will and a trust are generally included in an extensive estate plan. You can maintain control over your assets in the case of incapacity and death. You can also avoid probate and maintain your privacy.
You can also appoint a guardian for minor children. You can make sure that family, friends, and charitable organizations receive distributions in accordance with your desires.
Both of them are crucial components of your long-term financial strategy. Consult an estate administration lawyer in writing a will or trust.
Ensure Your Wishes Are Protected
Wills and trusts are two distinct options when it comes to estate planning. Knowing the difference between a will and a trust is essential in making the right decision for your circumstance.
Seek the assistance of an experienced legal professional to help you decide which is best for you. Secure your future!
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