When preparing for the next chapter in your life, there are many factors to consider and many things to be done. But, as with anything in life, there are multiple ways to go about this preparation, each with very different specifics and requirements.
In this article, we will outline two of the most common ways, wills and trusts, and go over what differentiates them. By doing so, we hope to give a bit of insight into which option is right for you.
What Is a Will?
A will is a plan that outlines your final wishes in detail, for your family and your beneficiaries to act upon after your passing. When choosing a will to outline your wishes, you must:
- Name beneficiaries for your property
- Name guardians for any children living with you
- Name property managers for your children’s future property
- Name an executor
- Instruct how your taxes and debts will be paid after your passing
- Have witnesses when the document is drafted
What Is a Trust?
Although a will and a trust share some similarities, there are important differences to note. According to Bankrate, “A trust is a legal vehicle to pass assets to a trustee, who in turn holds those assets — in a trust fund — for a third party, such as a beneficiary. Many people create trusts to minimize hassles and fees for their loved ones, or to create a legacy of charitable giving.”
When creating a trust, you must name your beneficiaries, leave property to young children, revise your documents accordingly, have a notary public, and transfer your property. The main benefits of a trust are that they allow you to avoid probate, keep privacy after death, provide protection from court challenges, and avoid a conservatorship.
How Do They Differ From One Another?
The main differences between a will and a trust involve the handling of conservatorship and probate court. With a trust, you can avoid both of these detrimental aspects of your passing and save your family money and time in the process. Although there is definitely more that goes into a trust than a will, it tends to be a better option for individuals as it saves their families money in court fees and other fees that a will simply does not.
In the end, although wills and trusts both effectively lead to the same thing, the differences are astronomical. Fortunately, by working with a local wills and trusts attorney, you can learn which one option best fits your situation.
With this said, if you are looking for someone to help you through your estate planning process, contact the Law Offices of Howe and Garside today! We have years of experience dealing with wills and trusts and are happy to assist you with all your planning needs!