Wills vs Trusts
Are you ready to write down the way you want your assets and property distributed after your death? Do you want to continue to provide for your loved ones after you are gone? Call now or fill out the form below to connect to an experienced attorney who can tell you the difference between trusts and wills and which one will be the best for your situation.
How Are They Different?
A trust, is a legal document where one party holds property or assets for the benefit of another. The person creating the trust chooses a trustee to oversee the trust and to deliver the money or property as written in the directions. You may put the trust into effect while you are still alive. A will is also a legal document, or testament, that directs how to distribute a person’s money and property upon death. However, a will must go through probate court before the executor distributes the items listed. The following article outlines the differences between trusts and wills.
Create a trust no matter the size of your estate. You may put a trust into effect during your lifetime and have it continued after your death. You may also want to add one as part of your will. Reasons you may consider putting together a trust include:
- Wanting to lower the taxes on your estate
- Not wanting your family going through probate
- Wanting to specify when your beneficiaries receive their inheritance
- Needing someone to supervise minor children’s money or property
- Not needing to include last wishes
- Protecting assets from creditors
- Maintaining privacy regarding your assets and property
Types of Trusts
There are several types of trusts you can choose from depending on your situation:
- Revocable Trusts – Also called a living trust, you make it during your lifetime, and you can alter, change, modify or revoke it. You may also want to serve as the initial trustee.
- Irrevocable Trusts – Like the revocable trust, you can create it while you live. However, with this type of trust, you cannot alter, change, modify or revoke it.
- Charitable Trust – This trust is for the benefit of a charity or the public. You may want to establish a charitable trust to avoid or lower estate or gift taxes.
- Special Needs Trust – You can set up this kind of trust for someone who receives government benefits, such as Social Security disability. The goal is to allow the beneficiary to receive property and assets through the trust and still qualify for government benefits.
The process of setting up the trust will depend on the type you want. Federal and state laws differ with each trust. Additionally trusts are subject to taxation. Your beneficiaries may have to pay taxes on income and distributions they receive from the trust.
The purpose of a will, is to identify who will receive your assets and property. As a result, you must choose an executor to carry out the directions you leave upon your death. A common misconception about wills is that there is a one-size-fits-all type of document. Depending on the size of your estate, you may only need a one-page will, or you may need a hundred pages. Items you should include are:
- Executor or executrix
- Guardian for minor children
- How to distribute property or assets
Once you complete the will, ask two people to witness the signing. The people you choose must be over the age of 18 and not listed as beneficiaries. Sign and date the will and then have the witnesses sign and date it as well. Place the original will in a safe and easily accessible location. Be sure to tell your executor exactly where it is.
Why You Should Hire a Will and Trust Attorney
Both wills and trusts are highly personal documents. To ensure the correct distribution of your estate according to your wishes, a dedicated lawyer will help you create a well-crafted document. You can clearly state your needs and wants in these documents to avoid any confusion or turmoil between loved ones.
The state you reside in will outline the rules of a valid will. The laws may include:
- Legal age
- Being of sound mind
- Voluntary signing
- Proper disposal of the property
- Signed, dated and witnessed correctly
Unfortunate mistakes can happen when creating a trust, especially if you do it without legal help. These mistakes may include:
- Choosing the wrong trustee
- Failing to update the trust when circumstances change
- Not adequately funding the trust
- Not having additional documents such as powers of attorney or HIPAA authorization
If you have a large estate, the complexities of deciding which trust to use or what to put in a will may start to feel overwhelming. Choosing to use an attorney experienced in helping you decide between a trust vs will could put your mind at ease when sorting through family or financial situations. In addition to the circumstances listed above, your attorney can help you with trust and will issues involving:
- Real estate in more than one state
- A recent divorce
- Substantial retirement assets
- One or more businesses
Work with an Experienced Estate Planning Attorney
Are you looking to find a lawyer to help you with your estate planning needs? If you are deciding to make a trust vs a will or want to make changes to an existing one, then a dedicated estate planning attorney will help advise you on how to get your affairs in order. Give yourself and your family peace of mind for the future.
We’re here to help connect you with an attorney in your area who can help you determine the best approach for settling your estate without costly legal problems. Click below to answer the questions that are on our website. Your category, location, and additional information will allow us to connect you with the best legal professional for your needs. We will send you over the results instantly!
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!