Most people don’t like to think of their passing away and therefore avoid asset planning. But remember without a will or a trust in place, your property may be distributed against your wishes. That is why you need to put aside all of your anxiety and take the right steps towards estate planning to ensure your loved ones inherit your assets and sentimental belongings after your death. After all, the more you are prepared for the time “after”, the more the people you love will feel your concern and care.
There are two foundational essentials for estate planning – a will and a trust. It is important to know the difference between these terms to choose the most advantageous estate plan for you.
Advantages of the Will
A will (a testament, a probate) is a written legal document, allowing to distribute a deceased person’s property according to his/her wish. A will gives you the ability to:
– Choose beneficiaries of your personal property and real estate
– Choose your testamentary executor; who will take care of your affairs after death
– Include court supervision to ensure that your executor follows all your instructions
Keep in mind, that a will becomes public record after you are gone. It is also subjects to court proceedings if necessary.
It is also possible to name a guardian for your children if you have any. Although the guardian is named, the court may still affirm or reject your nomination.
A will is less expensive to be formalized than a trust. Once a will is compiled, it requires no further involvement unless you wish to make some changes.
Advantages of a Trust
A trust is a good alternative to a will, although there are some important distinctions. If you use a trust, you can manage and alter your assets during your life. You can assign a trustee, who will manage your assets according to your instructions. An estate planning attorney can help you understand all of the pros and cons and to choose the right document for you.
Why do people prefer trusts?
– Trusts don’t undergo probate proceedings and unlike a will are generally not subject to court review.
– Even if some disputes arise, there is generally no requirement for court.
– Trusts are not publicrecord, all the assets and decisions will be kept private.
– You continue controlling your trust assets as long as you are alive.
– If you lose your mental or physical health, you assign a successor, who will control your assets for you.
– If all your property is kept within a trust, there will generally be no probate expenses.