Planning your estate can be a daunting task. There are quite a few options available in formulating an estate plan. Two of the most common options are wills and trusts. While both serve as useful tools in distributing up your property and assets, there are some key differences to consider from our estate planning attorneys.
The primary difference between wills and trusts is that a will takes effect upon your death, while a trust can go into effect immediately if you so choose, allowing you or your designated trustee to manage your assets during your lifetime. With a will, you designate who receives which assets after your death and your wishes are ultimately determined by a probate judge who then enters a court order distributing the assets of your estate.
In contrast, a trust permits you to designate your beneficiaries but avoids probate court since your named trustee(s) or successor trustee(s) are empowered with the ability to distribute assets held in trust, thereby avoiding the time and expense of probate court. Many clients enjoy this aspect of their trust the most. It provides them peace of mind knowing that their beneficiaries will not be saddled with the cost of pursuing a probate case, which is typically thousands of dollars at a minimum, or have to wait for a final distribution by a court in order to receive their inheritance.
A trust also permits you to choose the timing of any distributions to beneficiaries, whether it be immediately upon your death or in increments over their lifetime or when they reach the age of majority. Having this flexibility in controlling when and how beneficiaries receive assets or income is an important benefit to some individuals.
Other key differences between wills and trusts include privacy and the guardianship of children. After you die, a will becomes public record, while a trust does not. In addition, real property held in trust is titled in the name of the trust, not the name of the settlor or trustee, so it is more difficult for creditors to locate real property owned by you. This leads many people opting to create trusts so that they can keep their assets private.
However, if you wish to name a guardian or custodian for minor or disabled children upon your passing, that will require a will since custody or guardianship can only be granted by a court of competent jurisdiction.
Estate Planning Attorneys
While wills are relatively inflexible as compared to trusts, some individuals prefer to have their estate overseen by a probate court to ensure that their wishes are strictly adhered to. This is especially important if an individual is concerned with having court oversight to ensure their wishes are strictly adhere to. The experienced estate planning attorneys at Gehres Law Group would be happy to answer other questions you may have concerning your estate planning options. Contact us today for a free evaluation.