Having a plan for what happens to your assets once you’re gone can help make things easier for your family during a hard time and make sure your wishes are respected and upheld. A last will and a living trust are essential estate planning tools but serve different purposes and offer distinct benefits. Understanding the differences between the two can help you make an informed choice about which is right for your unique situation.
What is a Will?
A will, also known as a last will and testament, is a legal document that outlines how your assets will be distributed upon your death. It also allows you to name an executor to manage your estate and handle the probate process. Additionally, a will lets you appoint guardians for your children, which is a critical consideration for parents. However, a will must go through probate which is a court-supervised process that can be time-consuming, costly, and public. Probate proceedings can take months or even years, depending on the complexity of your estate and whether disputes arise.
Benefits of a Will
Guardianship for children – Allows parents to designate legal guardians for their children
Asset Distribution Control – Specifies who inherits your assets preventing the state from deciding
Digital Asset Management – Can include instructions for digital accounts (I.e. Social Media accounts, Crypto wallets, etc.)
Executor Appointment – This lets you name an executor to manage your asset and ensure your wishes are followed
Funeral Instructions – Provides clarity on burial/creation preferences to ease family stress
What is a Trust?
A trust is a legal arrangement where you, as the grantor, transfer ownership of your assets to a trustee who manages them on behalf of your beneficiaries. Trusts come in many forms, but the most common is a revocable living trust. Unlike a will, a trust allows your assets to bypass probate, providing a faster and more private transfer of property to your heirs. A trust also takes effect during your lifetime, enabling you to plan for incapacity by designating a trustee to manage your assets if you become unable to do so.
Benefits of a Trust
Probate Avoidance- A trust can help speed up the transfer of assets by avoiding the probate process
Incapacity Planning- In case you were incapacitated, a trust allows your successor to step in and execute your trust without waiting for a court ruling
Tax Efficiency – Trust can be revocable or irrevocable, which means they can be changed after they’re created or not. Because you’re transferring assets out of your estate, there may be tax benefits with an irrevocable trust.
Own property in multiple states – If your property is located in more than one state, a trust can streamline the probate process by avoiding it entirely
Control over asset distribution – A trust lets you control over when your beneficiaries receive their inheritance, instead of all at once.
Which one should I choose?For many people, the decision between a will and a trust isn’t an either-or scenario. Both tools can work together to create a comprehensive estate plan. For example, a will can serve as a“Pour-over” document that ensures any assets not placed in your trust during your lifetime are transferred into the trust upon your death. This approach ensures that all your assets are managed according to your wishes, even if some were inadvertently left out of the trust. When deciding between a will and a trust, consider your goals, the complexity of your estate, and your family's unique needs. If you have minor children, a will is essential for naming guardians. If you want to avoid probate, protect your privacy, or plan for incapacity, a trust may be the better choice. Additionally, individuals with significant assets or blended families often benefit from the added flexibility and control that a trust provides. Ultimately, the best approach to estate planning is to seek guidance from an experienced attorney who can help you assess your situation and tailor a plan to meet your needs.
At Maimone Legal, we specialize in crafting personalized estate plans that provide peace of mind and ensure your wishes are carried out. Whether you need a will, a trust, or a combination of both, our team is here to help you navigate the complexities of estate planning with confidence. Contact us today to schedule a consultation and take the first step toward securing your legacy.
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