Most people do not understand the difference between wills and trusts. However, both are a comprehensive legal strategy that must be taken in order to protect one's interests, even after passing on. If you are looking at estate planning options and you are somebody who has been diligent in trying to preserve your assets, then it is natural to want some level of control of your assets, even once you have passed on. By taking these steps, your assets will go where you want them to go.
The reality is, regardless of what type of means you have, you need to select from one of two strategies in order to ensure that assets are given out to the right people or organizations upon your death. In fact, the only way to ensure that your assets are distributed according to your wishes and in a timely manner, it's through an estate plan.
Available legal options for your assets
The proper distribution of one's assets can be achieved through wills and trusts. The reality is that every circumstance is different and so the right strategy will come to bear based on the individual circumstances. For some people, a living trust can be useful and is an extremely practical tool. For example, a trust is a useful tool when one has real estate holdings and wants to avoid a lengthy probate process. For others, however, it may not be as effective, making it unnecessary. It is important to layout all plans and strategies with an attorney who specializes in wills and trust. The proper attorney can explain the differences between the two and decide which one is best for the client's situation.
The difference between wills and trusts can be explained as such. A will is a written document that is signed and witnessed, which is used to indicate how one wants his or her property to be distributed after death. A will is revocable and amendable as long as it occurs during one's lifetime. But on the other hand, trusts provide lifetime and after-death property management instructions. There are significant advantages to having trusts, which include that they can be used to manage the property. If the trustee is disabled by accident or illness, a successor trustee can be selected to manage the trust property. This will help avoid the expense and inconvenience of court-supervised distribution of your estates.
Other factors to consider
However, it is important to understand that trust is far more expensive to set up than a typical will because far more work goes into creating it. In addition, it is necessary for a trust to be funded. A living trust can only control those assets that have been actively put into it. If one's assets are not part of the trust or the individual dies without properly funding the trust, the trust will be of no benefit to the estate. When it comes to choosing between wills and trusts, most people prefer the simplicity of a will. So, while a will has limitations in that they are not able to be active while one is still alive, they are an excellent mechanism to ensure that property is properly distributed after one's passing.
To learn more about wills and trusts and how they can be used in your estate planning, call my office and schedule a consultation.
Note: This is for information only and does not constitute legal advice.