WILL OR TRUST?
One of the first questions clients ask me during initial consultations is “Trust Agreement or Will”?
As with most things, the answer is “it depends.”
A Will is generally used for smaller and/or less complicated estates and/or to name a Guardian for one’s minor children.
Trusts are used when the goal is to accomplish something more than just distributing one’s assets upon death and naming a Guardian.
These objectives include avoiding probate, maintaining one’s financial privacy even at death, shielding one’s assets from creditors, avoiding estate taxes, and/or preserving access to current or future government assistance.
The only way to know for sure which is most appropriate for you is to meet with a qualified estate planning attorney who can evaluate your financial, family, and business situation. After this evaluation, he or she can recommend and design the best estate planning solution for you.
A will is a legal document that specifies how a person’s assets will be distributed after their death. It can also include instructions for the care of minor children and pets. A will is typically created and executed while the person is still alive and can be changed or revoked at any time.
A trust, on the other hand, is a legal arrangement where a trustee holds and manages assets for the benefit of one or more beneficiaries. The assets in a trust are not owned by the person creating the trust (the grantor), but are instead managed by the trustee for the benefit of the beneficiaries. A trust can be used for a variety of purposes, such as managing assets for a minor child, avoiding probate, or reducing taxes.
Both wills and trusts can be used to plan for the distribution of assets after death, but they serve different purposes and have different advantages and disadvantages.
Wills are relatively simple to create and are generally less expensive than trusts, but they can be subject to probate, which can be a time-consuming and costly process. Additionally, wills become public record when they are submitted for probate, which means that the details of the will are available for anyone to see.
Trusts, on the other hand, can be more complex to create and may require the services of an attorney, but they can provide more privacy and can be used to avoid probate. Trusts can also be more flexible than wills in terms of how assets are distributed and can be used to manage assets for beneficiaries who are unable to do so themselves.
Overall, both wills and trusts can be useful tools for estate planning. The best option will depend on your individual circumstances and goals. It is important to consult with an attorney or financial advisor to help you determine which option is right for you.