The Differences Between Trusts and Wills
You have worked hard your entire life to collect the assets that you have today, so it's only logical that if something were to happen to you (such as being ill or incapacitated) or if you were to pass away, you would want to retain some control over those hard-earned assets. This is when estate planning can come in handy.
There are two major forms of legal documents used in estate planning: a will and a trust. Many people have heard of a will, especially since it is a term that is frequently used in TV series and movies. However, fewer people understand what a trust is or the distinctions between the two types of estate plans.
What exactly is a will?
A will is a written document that specifies how your property and assets will be allocated in the event of your death. It is revocable, which means you can amend it at any moment during your lifetime. When one passes, their assets are managed and dispersed through a court-supervised process called probate.
Also, if you do not identify someone to be in charge of your estate (known as a fiduciary) or someone to care for any minor children (known as a guardian) in your will, the Court will decide who should be in charge of your estate and who will care for any children you may have. Furthermore, once your estate is processed through court, it becomes public record.
What Exactly Is A Trust?
A trust is a legal document that, like a will, is designed to offer instructions on how your property and assets will be dispersed upon your death. It is likewise revocable and subject to alteration at any time during your lifetime. However, one of the primary distinctions between a trust and a will is the benefits of wealth management if you become ill, disabled, or die. A properly structured trust plan, unlike a will, can let you avoid the Probate procedure entirely. You will appoint a successor Trustee to take over if you are unable to.
Is It Better to Have A Will or a Trust?
The answer to this question is typical of most. It all depends. In general, if you own a house (regardless of equity), a trust is a superior instrument to utilize because it helps to assure proper estate distribution, management, and preservation. It is the only estate planning instrument that can achieve all three of these objectives. A trust, on the other hand, is more expensive to establish and may necessitate additional time, effort, and expenditure to keep it properly maintained and up to date. While a will is often less expensive to set up in the beginning, the possible legal expenses and inconveniences involved with having to go through the Probate process may outweigh the potential savings from establishing a trust.
Meeting with a qualified, professional, and experienced estate planning attorney is the best way to understand all of the potential benefits and downsides, as well as whether or not a will or trust is ideal for you. The attorney can examine all of your specific circumstances and advise you on the best solutions for you.
Estate Planning Attorneys in Los Angeles, California
It is now more essential than ever to establish a comprehensive plan that addresses more than simply who receives what from your estate. Our Los Angeles estate planning attorneys will work with you to ensure that your plan works when the time comes, and that it keeps those you care about out of court and out of dispute. All of our plans feature a one-of-a-kind approach for passing on your most essential non-financial assets.
Why not schedule your FREE consultation with our estate planning team? If you have any questions or would like more information, contact us today to set up a no-cost/no-obligation 30-minute consultation.