When it comes to estate planning, two of the most common documents people often hear about are wills and trusts. While both documents serve the same purpose of distributing your assets after your death, they have significant differences that can make one more beneficial than the other depending on your situation. In this blog post, we'll explore the differences between a will and a trust to help you make an informed decision about which document is right for you.
What is a Will?
A will is a legal document that outlines how you want your assets to be distributed after your death. It allows you to name an executor who will be responsible for carrying out your wishes and distributing your assets to your beneficiaries. A will can also be used to name a guardian for your minor children and specify any funeral arrangements you want.
What is a Trust?
A trust is a legal entity that holds your assets for the benefit of your beneficiaries. You can create a trust while you're alive (living trust) or after your death (testamentary trust). A trust allows you to avoid probate, which is the court-supervised process of distributing your assets after your death. It also gives you more control over how your assets are distributed and can help you minimize estate taxes.
Key Differences Between a Will and a Trust
- Probate: As mentioned earlier, a will must go through probate, which can be time-consuming and expensive. A trust, on the other hand, avoids probate altogether.
- Control: With a will, you have limited control over how your assets are distributed after your death. With a trust, you can specify how and when your assets are distributed to your beneficiaries.
- Privacy: Wills are public documents, which means anyone can access them. Trusts, however, are private documents that only your beneficiaries and trustee can access.
- Cost: While both documents have costs associated with creating them, a trust can be more expensive due to the additional legal fees involved.
Which Document is Right for You?
The answer to this question depends on your specific situation. If you have a relatively simple estate and don't mind your will going through probate, a will may be sufficient. However, if you have a more complex estate, want to avoid probate, or want more control over how your assets are distributed, a trust may be a better option.
At Feldman Law Group, we can help you determine which document is right for you and guide you through the estate planning process. Contact us today to schedule a consultation.