Does Your Estate Plan Need a Will,Trust Or Both?

Estate planning allows people to prepare in advance and ensure their wishes are carried out after passing in the easiest and most tax-efficient way possible. There are many estate planning options available, and deciding which one to include in the plan can be overwhelming, especially to those new to the whole process. However, no matter the end goal, estate planning constitutes two main elements: a will and a trust.

But what are they, and which one does your estate plan need?

Below, we discuss in detail what wills and trusts are so it’s easier for you to make crucial decisions in securing your legacy and the financial security of your loved ones.

 

What Is a Will?

A will, commonly referred to as a Last Will and Testament, is a legal document stating your intentions for distributing your assets after you pass. Anyone over the age of 18 and who has any possessions should have a will. In its absence, your property, savings and investments will be distributed according to the courts and state laws. 

Your spouse, children, parents or immediate relatives will automatically become your beneficiaries if you pass without a will. However, if you have no known family, your assets will most likely go to the state since the law does not permit wealth distributions to a friend, charity or other non-related entities. For this reason, working with a lawyer for wills and trusts is crucial to ensure your wealth is distributed according to your wishes.

 

What Is a Trust?

A trust is an arrangement that constitutes three parties: the Grantor, the Trustee and the Beneficiary. A Trust is created when the estate owner or Grantor transfers the financial benefit of property to a third party while keeping legal control and ownership by appointing themselves or someone else as the Trustee. Of course, separate people can hold each of these roles, but in the case of revocable living trusts, one person initially holds all three.

Through trusts, estate owners can avoid the costs associated with owning property outright and transfer the management burden to a third party. In addition, they can also be used with a retirement plan to transfer assets to minors without appointing a guardian. With the help of a will and trust lawyer, the Grantor can tailor their trust to meet any objective.

 

Wills vs. Trusts: Knowing the Difference

Wills and trusts are often confused since the two have the same primary function – to allow an estate owner to name the people or organizations that will receive their assets. However, their main difference is how and when they take effect. Trusts are effective immediately upon you sign the necessary documents, while your will doesn’t go into effect until after your death. 

Another difference between the two is wills require probate while trusts don’t. Property and assets declared in a will must go through probate before they are transferred to beneficiaries. On the other hand, the assets placed in a trust bypass probate, which means the beneficiary immediately gets their inheritance. 

Then, there’s also the matter of privacy between the two arrangements. Since wills have to go through probate, the documents become public records when they are submitted to the court for processing. However, because trusts bypass probate, the arrangement stays private and only known to those involved.

When discussing wills and trusts, it’s essential to know that they have unique benefits that allow you to manage your wealth according to your liking. It’s helpful to seek the assistance of a lawyer for wills and trusts to help assess your situation and determine your goals at the very beginning of the process so you can determine the best solution that suits your objectives.

 

Why You Need Both a Will and a Trust

Most estate planning involves both a will and a trust. Both allow you to have a detailed plan that guarantees an easy and immediate wealth distribution under specified conditions. Wills and trusts complement each other and are essential elements in a comprehensive estate plan.

 

The Lawyers at Wiles Law Firm Is Here To Help

Managing and preparing for your estate is a task that requires expert input. Our lawyers for trusts and wills here at Wiles Lawl can help make this complex process a lot easier for you. We are a full-service business, tax and estate planning law firm committed to helping families preserve their legacy and protect their assets through specialized wealth preservation strategies. An estates wills and trusts lawyer can make the necessary arrangements and create a complete plan tailored to your needs and goals.

 

Contact us today.