Undecided Between A Will And A Trust? Know These Key Differences
Has the time come to finally create an estate plan, but you are not sure if you should create a will or a trust? If so, you'll want to know the following things about them.
Wills
When you create a will, you are essentially creating a written document that decides who will receive what assets. This can be very straightforward with one person receiving all your assets or very specific with certain people getting certain assets. It really depends on your personal needs and how complicated asset distribution needs to be.
A will also needs to name an executor, which is the person who is responsible for controlling your estate after you pass away. If you have a simple estate with one person receiving all your assets, that person can also be the executor. If you have a lot of heirs, then you may want a neutral third party to be the executor. Either way, it should be someone that you trust.
You will also name guardians as part of a will. Make sure that you talk with the person first before appointing them as a guardian to ensure that they want the responsibility. However, you should also select a guardian for your pets as well since they will need a new home after you pass away.
Trusts
A revocable living trust is something that you create where you are the trustee. It gives you the option to change it at any time when you are alive, and you put assets into the trust that are distributed after you pass away. This includes your home, retirement accounts, savings, and things of that nature.
The main difference between a will and a trust is that you have more control over asset distribution with a trust. You are able to decide when and how people receive assets, even after you're gone. For example, you can set aside money that is specifically used for someone's college education.
Your trust will also need a trustee to succeed you after you pass away. The trustee is like the executor since they have control of the trust and control asset distribution. You'll want to assign a trustee that will carry out the rules of the trust as you've described.
Reach out to a will and trust attorney in your area for more information about these two forms of estate planning. They'll help you decide on the one that will work best for your needs.
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