It can be challenging to understand what documents and legal instruments to include when creating your estate plan. Do you need a will, a trust, powers of attorney – or more?
Learning some key similarities and differences between wills and trusts is a good starting point. Wills and trusts can be used together or separately, but they do have some key differences that should be understood.
Knowing the differences
In order to effectively create a strong estate plan, you need to know the purpose and effect of various documents. A trust is a separate legal entity that either holds title to your property during your lifetime or takes legal possession of your property at the time of your death. By contrast, a will is a legal document that directs the distribution of assets upon the passing of its creator.
A will allows you to specify who receives what assets from your estate. It can also verify your wishes for medical decisions and end-of-life care, as well as appoint a guardian to look after your children after your passing. On the other hand, a trust can disperse its assets before you pass on, and you have more control over how and when a beneficiary receives the assets. For example, you can specify that a beneficiary can only gain limited access to an account once they turn 25 and have full access to it once they turn 30. Lastly and notably, a trust will allow you to bypass probate, while a will is always administered through probate court.
Which is right for me?
It can be hard to know what choices to make to help you create the best estate plan for your needs. Thankfully, you can rely on the experienced guidance of an estate planning attorney. They can help you determine what options are right for you. Choosing to have an estate plan is the first step in protecting your wishes, and wills and trusts can help you accomplish this. That is why the attorneys at Gudeman & Associates custom tailor estate plans based on you and your family’s specific needs and circumstances. Contact us today to schedule a free estate planning consultation.