By Solid Serenity Legal Solutions
Estate Planning can sometimes seem tricky, but it doesn’t have to be. One of the things that most trips people up is understanding what they need.
Do I need to have a trust? Would a will work better for my needs? What is the difference between the two? And how do I know which one is best for me?
Hopefully this article will help you get a better idea of how wills and trusts compare and also how they differ, but for making sure you choose the best path for you personally, you should speak with an experienced estate planning attorney.
One of the biggest differences between a Will and a Trust is who owns the assets. With a will, the document transfers all assets, in one lump sum, after death. Everything in the estate will be passed down directly to those named in the will after death.
A trust, however, transfers the assets to the Trust during your lifetime. The Trust owns your documents. Everything in the estate will be passed down to those appointed, but in a trust, assets can be disbursed before death, at death, or after a set time after death.
For instance, if you would like to limit the age when your children can access funds, or need to restrict access for an heir with Special Needs, the only way to do so is with a Trust.
With a trust there are two types of parties. (1) The “settlor” who puts the assets into the Trust and (2) the Trustee, who manages the assets in the Trust. Often, a couple will choose to work as Co-Trustees to their own Trust, and can generally access their assets in any way at any time for themselves.
Settlors also choose “Successor Trustees.” These Trustees can access financial documents and accounts when the Trustee is unable to take care of his or herself. Though you still need a Durable Power of Attorney for medical matters and to ensure all assets can be accessed, the Trust has built in incapacity planning for your family.
Another major difference between a Will and Trust is that a will must still be probated in courts. Probate costs families thousands of dollars and months of time and stress while they are already struggling with their own grief. A Trust does not need to be probated, as long as the assets you own are properly transferred to the Trust.
Another great benefit of not having to go through probate is the assets you own and how they are transferred are not public information. Since a Will is subject to a public probate hearing, strangers can see who gets what at your death.
Trusts and Wills have a lot of things in common and both are good planning options. Any plan is better than no plan.
The best way to get a full picture on what works best for you and your family needs is to sit down with your estate planning attorney and look through what assets you have and what you need to have taken care of were something to happen to you.