Are you trying to make sure that your assets are protected in the event of your death? Are you confused about the best possible route for you?
Well, there are options. But, you need to understand the nuances between different legal protections before you jump in.
Keep reading this article to find out the difference between a will and a trust.
What Is a Will?
A will is a legal document that goes through how your assets will be distributed after you pass away.
When you’re writing a will, you need to make sure that all of the language is clear. You also need to ensure that your will follows the terms and laws in your state. These can be different depending on where you live.
Wills can also include other protections, besides financial. Wills can lay out custody and guardianship for any of your minor children.
You can put together a living will, too, which lays out your medical preferences in the event that you are incapacitated in some way. If you’re married, your will may be combined with your spouse’s will.
The person you appoint to execute the terms of your will may need to hire a probate attorney to ensure that the process goes smoothly. Because wills require probate, they become a public record after they are submitted.
What Is a Trust?
Trusts are different than wills, since they don’t have to take effect after the death of the person setting it up. Trusts go into effect when they are funded and all the paperwork has been signed.
You can change the terms and funding of a trust at any time. The management of a trust can also be changed to someone else before death in the case of mental incapacity.
One of the benefits of a trust over a will is that you won’t need a probate lawyer, which will save your loved ones money.
However, trusts are more complicated than wills, which means that they’re more difficult to get set up properly. This also means that they can be more expensive up front, particularly if you want to make changes to the trust. But, because trusts do not require probate, they aren’t a public record and therefore offer more privacy than wills do.
A trust may also be created by your will. This is often done when leaving property or money to minor children, to ensure they’ll actually receive the funds and it won’t get eaten up before they are of age. Or, you can use a trust to give a certain amount of your estate to a charitable organization.
The Difference Between a Will and a Trust: Understand Your Choices Today
Hopefully, now that you’re aware of the difference between a will and a trust, you’ll be able to make the right decision for your financial needs.
Do you need more financial tips or help with other topics? Scroll through some of the other useful posts on this website.