ABOUT WILLS AND TRUSTS
Establishing a will and trust is a critical part of an estate plan for those who wish to protect family assets, both before and after a person’s passing. Wills and trusts are both estate planning tools that can help ensure your assets are protected and distributed as you intend to your beneficiaries. In certain situations, it is best to utilize the combination of a will and trusts to protect family assets.
A will is a legally enforceable document stating how you want your affairs handled and assets distributed after you die. It can also include specific directives of how you want your funeral or memorial held. Common components of a will: a list of assets and debts, including any family heirlooms, the contents of safe deposit boxes, property, and vehicles. You can leave these possessions to heirs, friends, or charities. A will can be effective in an estate transfer and other legal proceedings after death, but there are drawbacks that you should be aware of. Your estate will become part of the public record, for example, and anything left by a will must go through probate court.
A trust is an element of an estate plan that can provide unique advantages compared to a traditional will. Unlike a traditional will, the assets in a revocable trust avoid the probate process. A trust is a fiduciary relationship in which you give another party authority to handle your assets for the benefit of a third party, your beneficiaries. A trust can be created for a variety of functions, and there are many types of trusts. Overall, however, there are two categories: living and testamentary. The trust becomes operational at the trustor’s death. Unlike a will, a living trust passes property outside of probate court. Your property can be passed immediately and directly to your named beneficiaries.
While wills and trusts are both important tools for estate planning, each element differs in important ways. For example, a trust becomes legally enforceable when the grantor signs it, where a will cannot be enforced until the testator is deceased. After a person’s passing, their will goes through what is known as probate, a process in which the court facilitates the distribution of your estate. Compared to assets in a trust, which avoid the probate process, providing unique advantages. By utilizing each element of estate planning, you can best protect family assets both before and after your passing. Working with an experienced local attorney to establish a customized will and trust will ensure you are protecting family assets.