Wills and trusts can be quite confusing. How do you know which document best suits your needs? Can you have both a trust and a will? If you are not an attorney, it can be quite difficult to figure out how to distribute your estate properly.
In this post, you will learn the difference between wills and trusts. This information will make it easier for you to choose the right document for the needs of your family.
What Is a Last Will and Testament?
Similar to a living trust, a last will and testament is a document that indicates your wishes regarding your belongings in the event of your death. If you have a last will and testament in place, then the probate court will know how you would like to have your property distributed.
Your last will and testament will show who you want to receive particular pieces of property. In the document, you will also identify the person you want to put in charge of distributing your estate – this person is known as the executor.
If you have minor children, your last will and testament will indicate the person(s) you want to raise your children in the event of your demise. If you do not have a last will and testament, the probate court will decide who will take care of your children. This is why it is so important to make sure that you have this type of document in place.
Lastly, the last will and testament allows you to express your wishes regarding your burial and funeral arrangements. You will also outline how you would like the funeral service to proceed.
What Is a Living Trust?
A living trust is a legal construct that allows you to more easily transfer ownership of your property to your beneficiaries. With this type of document, you can move your property and assets into the trust to protect them. Once you pass, the trust can distribute the property and assets to the people you select in the manner you choose.
A living trust is different from a last will and testament in that it does not take affect only when you pass away. Executing your trust is the moment it becomes active.
Here Are Some of the Benefits of a Living Trust:
- A living trust can typically avoid the probate process.
- Provides privacy. A living trust cannot become public record.
- Potential tax benefits.
- Transfer of ownership is much easier.
Living trusts deal primarily with holding assets and property. This means that there are some things that a last will and testament will take care of that a living trust cannot.
Living trusts do not help you designate a guardian for any minor children that you have. You are also not able to indicate your wishes when it comes to your funeral and burial. When you create a living trust, you will most likely create a pour-over-will that addresses these matters.
As stated previously, wills and trusts can be confusing. If you are not sure what type of document would work the best for you, it would be a good idea to speak with a licensed attorney who can advise you accordingly. Troncelliti Law Associates is an estate planning law firm. Contact us today to schedule a consultation.