When creating an estate plan, one of the most important decisions you will make is whether to establish trust. According to law offices like Marchese & Maynard, LLP, a trust can be a helpful estate planning tool, but it is crucial to understand the difference between will and trust. Today, we will discuss the critical differences between wills and trusts and help you decide which option is best for you.
What Is A Will?
A will is a legal document that allows you to specify how you would like your property and assets to be distributed after your death. You can also use a will to appoint a guardian for your minor children.
Creating a will is a relatively simple process, and it does not require the assistance of an attorney. However, the law firm Marchese & Maynard believes it is essential to understand that a will only take effect after you die, which means that it cannot be used to manage your property or assets while you are alive.
What Is A Trust?
A trust is a legal entity that allows you to transfer ownership of your property and assets to another person or entity, known as the trustee. The trustee then holds and manages the property for the benefit of the beneficiaries named in the trust.
Trusts can be revocable or irrevocable. A revocable trust can be changed or dissolved at any time, while an irrevocable trust cannot be changed once it has been created.
Many different types of trusts can be used for various purposes, but the most common type of trust is a living trust. A living trust is created during your lifetime and can be used to manage your property and assets while you are alive.
The Benefits Of Having A Will
Marchese & Maynard believe that one of the main benefits of having a will is that it gives you complete control over how your property and assets will be distributed after your death. You can specify exactly who you want to receive your parcel from to decide how much they will accept.
Another benefit of having a will is that it can help to avoid disputes among your loved ones after you die. If your family knows exactly what your wishes are, they are less likely to argue about who should receive what.
Finally, a will can be used to appoint a guardian for your minor children. This is an essential consideration if you have young children, as it will ensure that they are taken care of by the person you choose if something happens to you.
The Benefits Of Having A Trust
One of the main benefits of having trust is that it can help you to avoid probate. Probate is the legal process used to distribute a person’s property and assets after death.
If you have a trust, your property and assets will be transferred to the trustee after your death, and the trustee will then distribute them to the beneficiaries named in the trust. This can help save time and money, as it can avoid the need for your family to go through probate.
Another benefit of having trust is that it can give you more control over how your property is managed after your death. For example, if you have young children, you can specify in the trust agreement that they will not receive their inheritance until they reach a certain age.
Finally, trusts can be used for tax planning purposes. If you are concerned about estate taxes, you may want to consider creating a trust to help reduce the amount of taxes your family will owe after your death.
How Do You Know Which One Is Right For You?
The best way to decide whether a will or trust is right for you is to speak with an experienced estate planning attorney. Places like Marchese & Maynard can help you understand the pros and cons of each option and make sure that you choose the one that is best for your unique situation.
The Cost Of Creating A Will Or Trust
The cost of creating a will or trust will vary depending on the complexity of your estate and the state in which you live. It will generally cost more to build trust than create a will.
However, the cost is not always an indicator of which option is best for you. For example, if you have a large and complex estate, it may be worth the extra cost to create a trust so that your family can avoid probate.
How To Change Your Will Or Trust If Your Situation Changes
If your situation changes, you can always change your will or trust. For example, if you get married or divorced, have children, or buy or sell property, you may need to change your estate plan.
To change a will, you will need to create a new will that revokes the old one. To make changes to trust, you will need to modify the trust agreement.
It’s essential to keep your estate plan up to date to reflect your current wishes. If you don’t, there is a risk that your property and assets will not be distributed the way you intended.
Final Thoughts
A will and a trust are vital estate planning tools that can help you protect your property and assets. Which one is right for you will depend on your unique situation.
Contact a lawyer today if you have questions about wills or trusts or need help creating an estate plan. They would be happy to answer any of your questions and help you get started.
Interesting Related Article: “Estate Planning is About More Than Distributing Your Assets“