If you are planning your estate, it is important to know what your options are. Many people wrongfully assume that their only option is to have a will, but trusts offer a great alternative. There are advantages and disadvantages to each of these options, so you should think carefully about which fulfills your needs best. Additionally, it is possible to have both a will and a trust. In any case, it is a good idea to discuss your needs with an estate planning lawyer to get advice tailored to your situation.
How a Trust Is Different From a Will
The biggest difference between a trust and a will is who will be responsible for carrying out your wishes. With a will, it is up to the courts to make sure everything is taken care of properly. With a trust, however, you will be putting your estate into the hands of a private individual. This is why it is so important to have complete faith in the trustee you choose.
Additionally, with a trust you can set conditions on the items you wish to leave to your loved ones. For example, if you wanted to leave your grandson your car, but only if he has his driver’s license at the time, you can make that a condition of the trust. That is something which is impossible with a will.
Finally, a trust avoids a few of the administrative and accounting aspects of a will. This may be a good thing or a bad thing, depending on your situation. Wills always go through probate, which is a period where the courts work out the requirements for the will. Trusts do not have a probate period, which is faster, but also less secure. Trusts are also not subject to estate taxes in some cases.
The Different Types of Trusts
There are two types of trusts:
- Revocable Trusts
- Irrevocable Trusts
Revocable trusts are generally considered more beneficial because you will continue to have access to the contents of the trust. In an irrevocable trust, on the other hand, no one may ever take any item out of the trust until the condition you set is met. So if you hope to continue living off of your estate after setting it up, you will either need a revocable living trust or a will. Is a very good idea to speak with an estate planning lawyer to make a more informed decision about whether a will or trust is better for you.