Wills vs Trusts

Contemplating your mortality is heavy. Nonetheless, it is crucial to safeguard the future of your loved ones.

Understanding wills and trusts is a decision that is equally complex and personal. You deserve to have a chance to delve into the differences, advantages, and potential pitfalls.

Are you ready to start making informed decisions? Then read this article carefully and consider asking for a referral to a local attorney who can counsel you.

How Are They Different?

A trust is a legal arrangement where one entity maintains ownership of property or assets for the benefit of another. The creator appoints a trustee who manages the trust and disburses the assets.

On the other hand, a will is a legally binding document that outlines the distribution of assets. However, it is often subject to probate court involvement.

These are the broad differences between the two, but there are many more distinctions to consider.

Benefits of a Trust

You can establish a trust that persists after you pass away. It might also be beneficial to incorporate one within your will. Here are some reasons you might want to contemplate setting up a trust:

• Lowering the taxes on your estate
• Keeping your family from having to go through probate
• Specifying how and when your beneficiaries receive their inheritance
• Assigning someone to monitor how minors use the money or property they receive
• Lacking the need or desire to express last wishes
• Protecting assets from creditors
• Maintaining privacy over your wealth and property

Types of Trusts

Setting up the trust will depend on the type you want. Federal and state laws differ depending on what you choose. Regardless, 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 have property and assets and still qualify for government benefits.

Benefits of a Will

The main goal of a will is to specify the beneficiaries of your assets and property. Consequently, it is crucial to appoint an executor to execute your instructions.

A widespread misunderstanding about wills is that there is a universal or standard format. However, the size and complexity of your testament depend on how much you own. It could be a one-page document or as extensive as a hundred-page dossier. The elements you should consider incorporating into your will include:

• Property
• Assets
• Beneficiaries
• 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 18 and not listed as beneficiaries. Then, place the original in a safe. 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. Accordingly, it is worth hiring a lawyer to draft them and ensure proper distribution. You can also clearly state your desires to avoid 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
• Intention
• 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 the following:

• 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

Work With an Experienced Estate Planning Attorney

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.

Submit a request online or call us 24/7 at (866) 345-6784!