When it comes to estate planning, there are a few different options you can choose from to help you protect your assets and your loved ones. Two of these options is the trust vs. will debate. Both have their own unique benefits, so how do you know which is better for you? Byunderstanding the key differences between these two estate planning tools, you can make an informed decision about the best option for your individual needs.
What Is a Will?
A will is a legal document that outlines your final wishes regarding your estate. This includes how you want your specific assets to be distributed, who will be responsible for carrying out your wishes, and who will act as the guardian of your minor children. Your will goes into effect after you pass away, and it must be followed by your named executor to be valid.
Other components of a will can include:
- Appointing a guardian for your minor children
- Outlining your funeral and burial wishes
- Specifying how you want your debts and taxes to be paid
- Naming an executor to carry out your final wishes
What Is a Trust?
A trust is an arrangement that allows a third party, known as the trustee, to hold and manage assets on behalf of the trust’s beneficiaries. The trustee has a legal duty to manage the trust property in accordance with the terms of the trust agreement and the wishes of the settlor (the person who created the trust). Trusts can be either revocable or irrevocable, and they can be used for a variety of purposes, such as asset protection, minimizing taxes, and avoiding probate.
Other components of a trust can include:
- Naming a trustee to manage the trust property
- Outlining the trustee’s duties and responsibilities
- Specifying how and when the trust property will be distributed to the beneficiaries
- Naming the beneficiaries of the trust
- Determining whether the trust is revocable or irrevocable.
While both wills and trusts each have their own unique benefits, many people prefer one or the other when it comes to choosing between the two.
Which Option Is Better for You?
The main reason why people need clear estate planning is to avoid family conflict and provide certainty about what will happen to their assets when they die. If you have a simple estate, then a will may be all you need. But if you have a more complex estate, or if you’re looking for ways to minimize taxes, avoid probate, or protect your assets from creditors, then a trust may be better. The reason why people need these two options varies depending on their individual circumstances.
Some people choose to have both a will and a trust, as this can provide the greatest flexibility and asset protection. But ultimately, the decision about whether to use a will or trust (or both) is a personal one that should only be made after taking time to consult with an experienced estate planning attorney. Understanding the value an estate planning attorney can bring to this process is critical.
How Can an Estate Planning Attorney Help Me?
An estate planning attorney can help you understand the pros and cons of both wills and trusts, as well as help you decide which option is best for your individual needs.
To begin the process, an attorney can:
- Conduct a thorough review of your assets and liabilities
- Analyze your goals and objectives
- Provide you with information about the benefits and drawbacks of both wills and trusts
- Recommend the best course of action for your individual circumstances
- Help you draft the necessary documents to carry out your wishes
Many people find themselves confused when it comes to estate planning. But with the help of an experienced attorney, the anxiety of this process can be put to rest.
The best type of attorney for the job exhibits:
- Compassion. This is not an easy task, as it demands you to consider life after you have passed. A good attorney will be understanding and sympathetic to the emotional toll this process has on you and your family.
- Attentiveness. You should feel confident that your attorney is taking the time to understand your specific circumstances and needs.
- Thoroughness. Your attorney should be able to explain the process in detail and answer any questions you may have.
- Experience. When it comes to estate planning, you want an attorney who has extensive experience and is up to date on the latest changes in the law.
- Patience. You may have a lot of questions, or you may not be sure about what you want. Either way, your attorney should be patient and guide you through the process step by step.
- Creativity. There are many ways to achieve your goals, and a good attorney will be creative in finding the legal solution that honors your wishes and protects your interests.
Tips for Advancing With a Will or Trust
If you have decided that a will or trust (or both) is right for you, here are some tips to get the process started:
- Schedule a consultation with an experienced estate planning attorney. This is the first and most important step. You need to have a clear understanding of your options before you can make an informed decision about what’s best for you.
- Gather information about your assets and liabilities. You will need to provide your attorney with a complete picture of your financial situation. This includes a list of your assets, such as property, savings, and investments, and liabilities,like debts, mortgages, and loans.
- Make a list of your goals and objectives. What do you want to achieve with your estate plan? Do you want to minimize taxes? Protect your assets from creditors? Provide for your loved ones? Your attorney can help you achieve these goals.
- Be prepared to discuss your wishes in detail. You will need to be very specific about your wishes for your estate. This includes the people you want to receive your assets, when they should receive them, and how you want your debts to be paid.
- Be prepared to make some tough decisions. Estate planning can be difficult, as it requires you to think about your own mortality. But making these decisions now means your wishes can be carried out after you’re gone.
If you are ready to get started on your estate plan, contact McCunn Law today. Our experienced attorneys can help you differentiate between wills and trusts, as well as draft the documents you need to protect your interests. We look forward to helping you and your family achieve peace of mind.